When the Supreme Court uses words like “dishonest” and “fraudulent,” it tends to leave a mark. For JSW Steel, the top court’s decision to scrap its $2.4 billion Bhushan Power acquisition, citing a breach of insolvency law isn’t just a legal speed bump. It’s a reputational skid that could ricochet across the group, most immediately onto JSW Paints' high-stakes bid for Akzo Nobel India.

Until last week, JSW Paints was a frontrunner to snap up Akzo’s India operations, including the crown jewel—Dulux. JSW Steel owns nearly 13% stake in JSW Paints. Now, with the court’s verdict raising questions around how JSW Steel executed the Bhushan Power acquisition, the optics around its Akzo bid have shifted. Akzo Nobel N V is likely seeking a clean, controversy-free exit, especially at a time when regulatory scrutiny is high in large-cap transactions.

The paint on this deal was already drying fast. Akzo India, a $2 billion asset with roughly 10% market share, has drawn binding bids from JSW Paints in a tie up with PE behemoth TPG and a consortium of Indigo Paints and Advent International. Pidilite may also be sniffing around, but reportedly only for the decorative paint slice.

For Indigo Paints, this may be the break it didn’t expect but sorely needed. The challenger brand has been hustling for scale and premiumisation. Buying Akzo gives it instant access to a national distribution footprint, manufacturing heft, and the kind of brand equity it would’ve taken a decade to build. It could also leapfrog Indigo Paints into the big league alongside Asian Paints, Berger, and Kansai Nerolac, who together command 75% of the market.

Backed by Advent’s $100 billion muscle, Indigo Paints’ bid is not just credible but looks clean, bankable, and drama-free. That’s a winning trifecta in M&A deals where the seller and investment bankers are averse to reputational risk. JSW Paints may now face perception challenges by association, even if its fundamentals remain sound.

If Indigo wins, expect the paint sector to enter a new phase—consolidation backed by global private equity, margin reinvention, and a fresh war for premium positioning. Also, one can then expect Indigo Paints’ valuation multiple to rerate sharply as investors love a good transformation story, especially one wrapped in global capital and market disruption.

Still, this isn’t a done deal. JSW may attempt damage control or sweeten the offer. Pidilite could emerge from the wings. But the Supreme Court’s ruling has shifted the centre of gravity. In M&A deals, capital may be king, but in tight contests, perceived credibility can tip the scales.