MUMBAI, Aug 7: Morgan Stanley has picked up a part of the stake offloaded by managing director Atul Choksey in Asian Paints (India) Limited. The US investment bank is believed to have bought around 3 per cent of Choksey's holdings with the rest 5 per cent divested being picked up by Capital International.

Morgan's association with the deal, which set the company stock afire on the markets last week, is significant given the investment bank's penchant for parking operations. It could mean that, sooner or later, Morgan will be looking for a buyer for the stake.

The investment bank refused comments on the deal. Asian Paints director Ashwin Dani, however, confirmed that Atul Choksey had indeed offered the stake to the other promoter families before selling out to the US funds.``It was a question of funds,'' Dani said. As the three families together own 45 per cent of the stake, there was no pressing need to buy Choksey's shares, he said. The managing director is believed to have sold around 35 lakh shares, or 8 per cent, of the company at Rs 357 a share, giving a total deal value of Rs 125 crore. Dani also hinted that there were differences of opinion between Choksey and the other promoter families on the funding of the company's expansion plans. Choksey's move for a GDR issue was reportedly unacceptable to the other promoters as it would have diluted their holdings. Reiterating their commitment Dani and director Abhay Vakil said, ``We are wedded to the paints business. The three families never had, don't have today and will never have in the future any intention to sell their shares in the company.''

Dani said the change in ownership pattern of the company would not in any way affect the 50:50 automotive paints joint venture with PPG Industries, Inc of the US. The industrial coatings business accounts for less than 5 per cent of the company's business today.

``Technology is the key in the industrial coatings business, and it makes sense to go in for strategic alliances,'' Dani said.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.