India's paint industry, dominated by players like Asian Paints, Berger and Kansai Nerolac, is suddenly full of new entrants who plan on giving incumbents a run for their money.

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The latest to join the bandwagon is Pidilite Industries, who launched a range of decorative paints in select geographies. The makers of products like Fevicol, M-Seal and Dr. Fixit have named their brand "Haisha" - a clever throwback to the yesteryear Fevicol ad "Dum Laga Ke, Haisha!"

With this, Pidilite joins the likes of Grasim, JSW, Nippon, Kamdhenu, Shalimar, Indigo and other paint companies, who are scrambling to gain market share from the industry leaders.

Pidilite Managing Director Bharat Puri explained that the rationale to enter an already crowded market actually came from the company's dealers.

“We call on more paint outlets than all other paint companies barring the leader and therefore, we had consistent demand from a lot of our dealers. We already have a range of wood finishes via our JV. So, we had a number dealers telling us, why don't you just complete the range?” Puri said during a conversation with CNBC-TV18.

Overall distribution advantage and familiarity with the category were some of the other factors that promoted Pidilite to take the plunge. "Dealers should be able to satisfy their customers with one company's range and therefore, in select geographies we have launched decorative paints," Puri said.

However, he was quick to clarify that this launch will not be on a grand scale, but slow, measured, and limited.

Puri himself is no stranger to the paints business, having spent 16 years at Asian Paints. Under his leadership, the market leader broke ground in new categories in both interior and exterior paints.

India's paint industry is likely to add 2.5 million kiloliters in capacity over the next three years, which is 20 percent of the existing capacity.

Also Read: From capacity expansion to increased competition - The future of India's paint industry

With competition intensifying, industry leaders are also loosening their purse strings. Asian Paints will increase its capacity to 2,636 million litres from the current 1,751 million litres through a capex worth Rs 8,000 crore. Berger Paints is also increasing its capacity to Rs 1,100 million litres from the current 620 million. With a Rs 316 crore capex plan, Kansai Nerolac is looking to expand its current capacity of 600 million litres by another 1.54 lakh kilolitres per year.

But is there enough demand to cater to this flood of supply? The answer is yes and possibly even more. Industry experts expect demand to grow between 11-13 percent annually, a fact Puri agrees to. "As far as paint companies are concerned, it is a market between Rs 60,000 crore and 70,000 crore and is growing in double digits. I think there's enough space for everybody."

While Pidilite is foraying into paints, paint companies are launching waterproofing products and adhesives too, viewing the entire home-building space as one category and launching a complete range of products there.

But Puri is unperturbed. "Every paint company has entered all of our categories, and they are most welcome to. You can see our performance after their entry and as leaders, you will always expect competition to increase rather than remain constant or decrease."

A foray into a different business does not mean distraction from the core category, according to Pidilite's MD. "Our major areas of focus still remains that we are a home improvement company and we have just improved our range of home improvement."

Fevicol's elephant has a new family member, as does India's paint industry. It remains to be seen how this disruption plays out and whether established players are able to maintain their dominance the way they did in the past.

Also Read: Berger Paints aims to grab 20% market share by 2023-end as construction activities pick up in non-urban centres

(Edited by : Hormaz Fatakia)

First Published:May 10, 2023 6:17 AM IST