CCI revises probe order against Asian Paints, removes previous findings

The Competition Commission of India (CCI) has revised its probe order against Asian Paints, removing earlier references to findings of dominance, following a complaint from Grasim Industries (Aditya Birla Group). This is a rare move by the regulator.

🧭 What changed in the revised order?

• Original order referenced a similar complaint by JSW Paints; the revised order deletes that reference, focusing solely on the Grasim complaint.

• It still maintains that Asian Paints is prima facie in a dominant position in the decorative paints market.

🔍 Background: Why is CCI probing?

• The probe was initiated on 1 July 2025, following Grasim’s allegations that Asian Paints abused dominance by offering exclusivity incentives (discounts, foreign travel) to dealers and pressuring landlords and transporters to avoid Grasim’s Birla Opus brand.

• A Director General investigation was ordered to submit findings within 90 days, with CCI clarifying that initial observations are not final and shouldn’t bias the probe.

👔 How has Asian Paints responded?

• The company is reviewing the CCI’s revised order and has stated it will take appropriate legal recourse while cooperating with the investigation.

• Here’s the market impact of the CCI’s revised probe order against Asian Paints:

  📉 Asian Paints Stock Reaction

  • Initial dip: After the original probe order on July 1, Asian Paints’ stock fell due to concerns about regulatory scrutiny and dominance abuse allegations.

  • Partial recovery: Following the revised order on July 2, which removed references to JSW Paints, investor sentiment improved slightly. The change was seen as softening the CCI’s stance.

  • July Mid-Month Movement:

    • The stock recovered over 3% from its lows.

    • Two institutional investors (mutual funds) increased their holdings in June, signaling confidence in long-term fundamentals despite short-term volatility.

  🏦 Sector View

  • The probe signals increased regulatory attention on India’s paint sector, especially on market leaders like Asian Paints.

  • Rival players such as Grasim (Birla Opus) and JSW Paints may benefit in the long run if CCI enforces stricter rules on market practices.

  📊 Investor Outlook

  • Short-term: Volatility expected due to regulatory overhang.

  • Long-term: Asian Paints’ dominant position remains strong, but the probe may moderate its aggressive dealer-level strategies.

  • Some analysts expect the company to refocus on brand value and innovation over aggressive market control.

In summary:

• CCI is continuing its investigation into potential dominance abuse by Asian Paints.

• The probe order has been refined to focus specifically on Grasim/Aditya Birla’s complaint, removing JSW references.

• The DG has up to early October 2025 to report back.

• Asian Paints is analyzing the revision and preparing for legal steps.