Quick Take | Kansai Nerolac’s latest acquisition to fortify presence in construction chemicals business

Tanfac Industries has gained 636 percent in the last 5 years. As of June 10, 2015, the share price was Rs 22.00 per share and now the current share price is Rs 161.95 with a market cap of Rs 162 crore.

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

Choose Stock Exchange: BSE LIVE NSE LIVE

26 Aug, 2025 12:21

Volume

Todays L/H

More

×

Sachin PalMoneycontrol Research

Construction chemicals offer a lucrative market opportunity in the Indian building materials industry. The sector has drawn the attention of major corporate houses, who have expanded their product offering in this space through organic and inorganic methods. The latest development in the sector being Kansai Nerolac’s acquisition of Perma Construction Aids for Rs 29 crore.

Gujarat-based Perma Construction primarily operates in the western part of India and offers a range of construction chemicals used for waterproofing, tile fixing, concrete repairs & flooring purposes.

Acquisition beneficial due to distribution synergies

While the acquisition is unlikely to have a meaningful impact on the consolidated financials as the target company has a topline of around Rs 28 crores compared to Kansai Nerolac’s topline of Rs 5,000 crores, it indicates Kansai’s intent to expand its products and category portfolio by leveraging its strong brand as well as its distribution channel. Kansai’s dealer network combined with Perma’s technological capabilities would be instrumental in scaling the construction chemicals business.

Competitive intensity on the rise

Fevicol maker Pidilite is the undisputed leader in the adhesive and construction chemicals business. However, it’s numero uno position is being aggressively challenged by heavyweights from other sectors. Asian Paints, India’s largest decorative paints company, has diversified into the adhesive and sealants business through the launch of epoxy and synthetic resin adhesives under Trugrip and Loctite brands. Similarly, UPVC and PVC pipe manufacturer Astral Poly Technik has rapidly scaled its construction chemical business after the acquisition of Resinova in 2014. Kansai also has a small presence in this market with products such as Nerofix - water based furniture adhesive.

The recent acquisition of Perma Construction is likely to further intensify competition in the market as Kansai plans to triple Perma’s revenues in 2-3 years through expansion to newer geographies.

Follow @Sach_Pal

For more research articles, visit our Moneycontrol Research page