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Asian Paints Corporate Governance Analysis

521 words - 3 pages

Share holding Pattern of APL

Analysing the shareholder’s pattern from the above data, we can clearly see that promoter holding in the company is more than 50%
Under Non Promoter holding (B1 and B2), there are two categories – Institutional investors and others.
In case of APL, Institutional investors include – Govt owned financial institutions, public and private sector commercial banks, insurance companies, mutual funds and FIIs. Together Institutional investor stake is around is 26.91
In the others category – Private corporate bodies, Non-resident Indians and overseas corporate bodies etc. comprises 20.30 % stake.
It would be interesting to analyse the shareholding pattern in light of the fact that role of any large shareholder in corporate governance is to the extent which outsiders ...view middle of the document...

The potential for institutional activism therefore in APL, is limited to some extent where through their block holding they can act as countervailing force against promoter. But when we see the ownership structure in contrast to its primary competitor BPL, Asian paints presents a much better picture in terms of any governance issues which may arise.

Major Stock Events:
1. May 2010 – Robust volume growth with substantial improvement in operating margins ~ 19% (best in last 6 years – Stock Price movement
2. May 2010 - Commenced operations in new manufacturing unit at Rohtak, Haryana with capacity of 1, 50,000 Kl with investment of 275 Cr.
3. Jan 2011- Margin decline due to slow increase of key crude based raw material price
4. Oct 2011 – Aggressive price hike to mitigate raw material pressure – Resulted in stock movement
5. May 2012 – Started building decorative paint plant in Khandala with capacity of 3,00,000 Kl scalable to 4,00,000 Kl
6. Jan 2013 – Sustained volume growth coupled with ~ 20% decline in Titanium dioxide (positive movement in Stock price)
7. Jul 2013 – Stock suffered steep decline in anticipation of adverse results due to volatile currency movements
8. Nov 2013 – Sustained volume and strong margins (contrary to expectation) – stock recovery , made a new high
9. Nov 2013 – Powder coating plant closed in Baddi due to decline in volumes
10. Feb 2014 – Unconditional cash offer for the shares of Berger international (BIL), Singapore by APIL Mauritius to make BIL wholly owned subsidiary and delist from Singapore Exchange Securities trading – KEY EVENT FOR GOVERNANCE RELATED ISSUE
11. April 2014 – Asian Paints (International) Ltd, Mauritius, subsidiary of Asian paints acquired 51% stake in Kadisco Chemical Industry PLC, Ethiopia
12. May 2014 – APL acquired entire stake of Ess Ess Bathroom Products Pvt ltd

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