Business

IIE DIGITAL DESK : Mukesh Ambani, chairman of Reliance Industries Limited (RIL), has once again demonstrated his business acumen by turning a strategic ₹500 crore investment into a massive ₹9,580 crore windfall. This incredible gain came from RIL’s long-term stake in Asian Paints, one of India’s most successful and trusted paint manufacturing companies.

Back in 2008, through its subsidiary Siddhant Commercials, Reliance had acquired a 4.9% stake in Asian Paints. The timing of the investment was critical—made during the global financial crisis, it reflected Ambani’s philosophy of contrarian investing: to bet on fundamentally strong companies during market downturns. Over the years, as Asian Paints grew into a market leader and its share prices soared, RIL's investment appreciated multi-fold.

In June 2025, Reliance executed a well-timed exit from the majority of its holdings in Asian Paints. The company sold 3.5 crore shares—equivalent to a 3.64% stake—for ₹7,703.5 crore in a block deal. Following this, it sold another 85 lakh shares in the open market, bringing in ₹1,876 crore. Together, these transactions fetched ₹9,579.5 crore—nearly 20 times the original investment.

Though Reliance has offloaded most of its stake, it still retains a small holding worth several hundred crores, indicating potential further gains. This move is seen not only as a financial masterstroke but also a strategic one, allowing RIL to free up capital for investments in its core growth sectors like green energy, 5G infrastructure, retail expansion, and digital services.

The decision to sell also came at a time when Asian Paints has been facing increased competition and a dip in market share, from 59% to 52%. The company is also navigating regulatory scrutiny over pricing practices. By exiting at what seems to be the stock’s near-peak valuation, Reliance managed to maximize returns before potential headwinds impact future performance.

This remarkable return of nearly 2,000% over 17 years showcases the power of long-term investing, smart capital allocation, and market timing. It also strengthens RIL’s balance sheet at a time when it is aggressively expanding into high-capital areas like green hydrogen, AI, and data centers.

The market response has been notable. Shares of Asian Paints remained relatively stable post-sale, while Reliance shares received a boost, reflecting investor confidence in the company’s financial management and future vision. Analysts have praised the deal as an example of textbook value investing and capital recycling.

Mukesh Ambani’s investment in Asian Paints adds to his growing list of successful bets. Over the past two decades, RIL has evolved from an oil & petrochemical giant into a diversified conglomerate with deep roots in telecom, retail, and technology. The Asian Paints exit demonstrates how Reliance continues to extract value even from passive investments, reinforcing its reputation for financial discipline and strategic clarity.

As the conglomerate gears up for its next phase of growth, the ₹9,580 crore cash inflow from this deal is likely to fuel further innovation and expansion, keeping Reliance Industries firmly positioned at the forefront of India’s corporate landscape.