Akzo Nobel India Limited , a leading paint and coatings company, is poised for robust performance in the third and fourth quarters of the fiscal year, driven by post-monsoon recovery and festive season demand. The company's Chairman and Managing Director, Rajiv Rajgopal, expressed optimism about the upcoming months, particularly October, November, and December, with expectations of strong performance extending beyond Diwali.

Growth Strategy and Acquisition

The company has outlined a two-step growth strategy:

1. Achieve mid-single digit growth equal to GDP growth
2. Pursue double-digit growth with an aggressive top-line focus, as directed by incoming owners

This strategy comes in light of the recent announcement that JSW Paints is acquiring a 74.76% stake in Akzo Nobel India for Rs 8,986.00 crore. The acquisition includes the Dulux brand, liquid coatings, marine and protective coatings, and vehicle refinished business. However, it excludes the powder coating business and the Bengaluru research centre.

Regulatory Approval and Timeline

The acquisition is currently awaiting approval from the Competition Commission of India (CCI), which is expected by mid-to-late October. The entire deal is anticipated to be completed by year-end or early January.

Market Response

Despite the positive outlook and acquisition news, Akzo Nobel India's shares closed 0.48% lower at Rs 3,374.80 on the day of the announcement.

Corporate Governance and Transparency

In line with its commitment to transparency and regulatory compliance, Akzo Nobel India recently published a newspaper advertisement regarding the '100 days Campaign-"SAKSHAM NIVESHAK" and Special Window for Re-lodgement of Transfer Request of Physical Shares'. This initiative aims to update KYC details of shareholders and prevent the transfer of unpaid/unclaimed dividends to the Investor Education and Protection Fund (IEPF).

The company has also opened a one-time special window for re-lodging share transfer requests that were submitted before April 1, 2019, and were returned, missing, or rejected due to documentation, process, or other reasons.

These measures demonstrate Akzo Nobel India's commitment to shareholder interests and regulatory compliance, which may contribute to investor confidence as the company moves forward with its growth plans and the impending acquisition by JSW Paints.

Akzo Nobel India Limited , a prominent player in the Indian paint and coatings industry, has secured a significant legal victory against the Central Excise and Service Tax Department, Mohali. The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) in Chandigarh has completely set aside a tax demand of INR 11.19 lakhs, including interest and penalties, in a ruling that marks a favorable outcome for the company.

Background of the Dispute

The case dates back to March 2021 when the Central Excise and Service Tax Department, Mohali, issued a demand order against Akzo Nobel India. The department alleged improper utilization of Education Cess and Secondary Higher Education Cess during the period 2015-2017 under the Cenvat Credit Rules, 2004. The original tax demand amounted to INR 5.58 lakhs, with additional interest and penalties bringing the total to INR 11.19 lakhs.

CESTAT's Ruling

In response to Akzo Nobel India's appeal, CESTAT Chandigarh thoroughly reviewed the company's submission and supporting documents. The tribunal's decision was unequivocally in favor of Akzo Nobel India. The appeal order completely annulled the original demand, including all associated interest and penalties.

Financial Implications

The ruling provides Akzo Nobel India with total relief of INR 11.19 lakhs, plus any additional interest that may have accrued. This decision not only eliminates the immediate financial burden but also sets a precedent that could be beneficial for the company in any similar future disputes.

Company's Disclosure

In compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Akzo Nobel India promptly disclosed this development to the stock exchanges. The company's filing detailed the chronology of events and the outcome of the appeal, demonstrating its commitment to transparent communication with stakeholders.

Conclusion

This legal victory for Akzo Nobel India underscores the importance of due process and the right to appeal in tax matters. It also highlights the company's effective management of legal challenges, which can have significant implications for its financial health and reputation in the market. As the litigation concludes in Akzo Nobel India's favor, it marks a positive resolution to what could have been a protracted legal battle, allowing the company to focus on its core business operations without the overhang of this tax dispute.