Shalimar Paints Ltd shares experienced a dramatic 20% surge on 3 August, opening at ₹67.68 and closing at ₹80.01. According to reports from Mint, the trading volumes were unusually high, with the traded value reaching ₹34.74 crore and 4.52 million shares changing hands during the session. The following day, shares added 3.16% with volumes surging to 10 million shares, demonstrating sustained investor interest in the paint company.
The unusually high trading volumes raised regulatory concerns, with the National Stock Exchange of India issuing a query to Shalimar Paints on the same day. As reported by Mint, the NSE stated that "significant increase in volume has been observed in Shalimar Paints Ltd." The exchange emphasized that it "in order to ensure that investors have the latest relevant information about the company and to inform the marketplace so that the interest of the investors is safeguarded, has written to the company." The volume spike was over five times more than the stock's 15-day simple moving average and 28 times higher than the company's one-year average daily volume.
On 3 August, Shalimar Paints informed stock exchanges that it had received a no-objection certificate to reclassify certain entities from the promoter/promoter group category to the public category. According to Mint, the company initially stated it was not aware of any material price-sensitive information requiring disclosure. However, two days later, the company countered its own reply, acknowledging it was "evaluating various strategic options with a view to improve the company's operational and financial position and enhance shareholder value." These options included restructuring of business operations, acquisition or transfer of assets, fund raising and corporate actions.
On 12 August, Shalimar Paints' board approved a ₹10,440 crore share-swap deal with Hella Infra Market Ltd, giving the building materials platform's shareholders collectively *more than 77% of Shalimar Paints. As reported by Mint, the deal offers an alternative to Hella Infra Market's planned ₹5,000 crore initial public offering. The company will convene an extraordinary general meeting to seek the requisite 75% shareholder approval for the share-swap deal, though the date has not been disclosed yet.
Legal experts told Mint that while a potential leak does not automatically invalidate the proposed share-swap, it is likely to invite regulatory scrutiny. Soumya Singh, co-founding partner at Thistle & Law, noted that "Sebi would likely examine the timeline very closely." Alay Razvi, managing partner at Accord Juris, explained that stock exchanges may seek further information on chronology, valuation, swap ratio, proposed issue, related-party status, pricing compliance and the company's assessment of undisclosed price-sensitive information. The company stated that the board, promoters including Hella Infra Market and key managerial personnel had no knowledge of the reasons for the share price spike.
