Event
Key details
Our view
The sale of specialty chemical division is inline with parent company’s (Akzo Nobel NV) strategy (announced in April 2017) to separate its Specialty chemicals business from its Paints and coatings business to create two focused businesses. Given the low margin nature of the chemical business, the sale would result in margins being optically higher for Akzo Nobel India. Further with internal accruals sufficing for capacity expansion, a likely special dividend is a possibility for shareholders of the Indian entity. However, the key concerns in terms of Akzo Nobel India’s volume underperformance and weaker execution compared to domestic peers remains unchanged. We maintain our Neutral rating on the stock.
ICI India is engaged in the manufacture and sale of paints. Co.'s primary business segments are paints and chemicals. The Paints business segment includes decorative and refinishing and the Chemical business segment includes uniqema, food starch, polymers, adhesives, and rubber chemicals.
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