Nippon Paint Eyes India's Youth Dividend for Expansion, Mulls Acquisitions

Japanese paint giant Nippon Paint is banking on India’s “youth dividend” as it seeks to expand its local operations, ramp up hiring, and strengthen its export commitments. With a business worth $400 million in the country, the company is exploring fresh investments to drive growth across its divisions.

“There’s such a youth dividend in India. A lot of countries are ageing, but India is still young. India is urbanizing, and its GDP is growing. So, there’s so much to speak for India. We have been here for nearly 20 years, and I see significant headroom for growth,” said Wee Siew Kim, Co-President of Nippon Paint Holdings and Group CEO of NIPSEA Group, in an interview. “The short answer is we are very positive on India.”

Nippon Paint, which began its India operations in 2006, currently operates four key business divisions—auto refinish, decorative, industrial, and automotive paints (a joint venture with Berger). The company manufactures paints locally for these divisions, with a substantial portion exported. Notably, the auto refinish and coil coating businesses, which cater to the steel industry, are globally led from India.

“The auto refinish business, valued at around $250-$270 million globally, is directed by an Indian leadership team. Similarly, our coil coating division, worth about $180 million, is also spearheaded from India. When combined with Japan, these divisions contribute nearly $400 million to our global business,” Kim stated.Nippon Paint is looking beyond organic growth by actively pursuing acquisitions and buyouts. “Organic growth involves investing in people, factories, and product development. However, we are also leveraging mergers and acquisitions (M&A) to strengthen our presence. In the past two years, we have successfully acquired local Indian companies, which has enabled us to enter new segments such as railways,” Kim revealed.

The company is particularly keen on acquisitions in the auto refinish segment to bolster its presence beyond northern India. “If we find the right partners or acquisition opportunities in other regions, it will enhance our pan-India footprint,” he added.

While discussing potential funding strategies, Kim did not rule out the possibility of an Indian IPO. “Never say never. The Indian market is attractive, with rich valuation multiples. If you look at how Indian stocks are trading—far ahead of global benchmarks in the paints and coatings sector—it is definitely worth considering raising funds in India at the right multiples,” he remarked.

Nippon Paint Holdings is currently listed on the Tokyo Stock Exchange, and its global expansion strategy follows an "asset assembler" approach. “This strategy allows us to leverage Japan’s lower cost of funding and channel it into our mission of maximizing shareholder value,” Kim concluded.