Astral shares tumbles 10% after board approves chemicals demerger; analysts cite growth concerns

Shares of Astral dropped 10% to its early market low of ₹1,339 after the opening bell on Monday, June 29, as investors were focusing on the demerged update, compared to the previous market close level of ₹1,486.90, according to NSE data.

Experts predict that although the move is to focus on capital allocation and improving margins, among other things, the demerger can potentially impact the company’s growth prospects of the still relatively sub-scale remaining Paints & Adhesives segment.

Astral demerger details

According to the terms of the demerger, all eligible and existing shareholders of Astral will receive one fully paid-up equity share of the newly formed company, Astral Chemie Limited, which holds a face value of ₹1 apiece for every share they own in the original entity.

The shareholders will receive the shares at a 1:1 ratio up to 24 hours ahead of the pre-determined record date of the corporate action.

The company will inform shareholders about the record date of the corporate action, along with details of the public listing of Astral Chemie Limited, in due time soon on the exchanges.

After the successful completion of the demerger, the newly formed Astral Chemie Limited is proposed to be listed on the stock exchanges, BSE and NSE, subject to the necessary approvals, and the shareholders will receive shares in the new entity as per the agreement.

The Astral demerger will be along with all the related assets and liabilities of the resulting company, and Al-Aziz Plastics Private Ltd will be amalgamated with the original entity as part of the arrangement.

The demerger now needs all the necessary statutory and regulatory approvals from the stock exchanges, the capital markets regulator Securities and Exchange Board of India (SEBI), and other relevant authorities.

What do analysts predict?

Analysts from the leading global investment firm, JP Morgan, said that Astral’s move to demerge its chemicals business is a move for the company to become more aggressive on capital allocation, margins and channel incentives.

However, this poses a risk as the demerger could negatively impact the growth prospects of the company’s relatively sub-scale Paints & Adhesives business segment, where the capex and A&P were being supported by the Plumbing business.

“Mathematically, Paints & Adhesives would be ~15% of consol PBT in FY28E and assuming 25x-35x FY28E P/E for the segment, the consol valuation drag would be restricted to 5-8%; however, cost/cash allocations remain to be seen,” JP Morgan analysts said.

While analysts from CLSA said that the company now has a more focused management approach, execution, capital allocation and returns as reasons for the demerger.

“We see limited impact on stock in near term from this transaction,” said CLSA analysts in a note, while focusing on monitoring future growth and margin improvement.

Astral share price

Astral shares have lost 2.6% in the last five years, nearly 29% in the last three years and over 6% in the last one year, according to NSE data. The company announced the demerger update after the market operating hours last week.

On a year-to-date basis, the company shares have lost nearly 2%, and around 11% in the last one month. Astral shares were trading more than 13% lower in the last five market sessions on NSE.

The company’s shares hit their 52-week high at ₹1,768.70 on March 11, 2026, while the 52-week low was at ₹1,263.70 as of August 12, 2025, as per the exchange data.

The company’s market capitalisation (m-cap) was at ₹36,383 crore as of the trading session on Monday, June 29.