The promoters of Asian Paints have taken a stake in Greenlam Industries, a small-cap stock

Discussion in 'Must-Read Interviews, Articles & News Items' started by Arjun, Jun 20, 2022.

  1. Arjun

    Arjun Chief Executive Officer (CEO) Staff Member

    Mar 19, 2015
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    Greenlam Industries is a small-cap company with a market capitalsation of Rs. 3900 crore.

    According to an announcement in the BSE, the Company has issued 63,10,680 equity shares to Smiti Holding and Trading Company Private Limited which is 100% ultimately beneficially owned by Mr. Jalaj Ashwin Dani and Mrs. Vita Jalaj Dani) at a price of Rs. 309 per equity share aggregating to Rs. 1,95,00,00,120.

    The Dani's are the promoters of Asian Paints.

    The Company has strong fundamentals. According to a research report by Sharekhan, it has a dominant industry position in laminates and is expected to be among the top three players in plywood and leader in particle board. The company is expected to gain market share from the unorganised segment in plywood and particleboard segments domestically, while it is expected to benefit from rising export opportunities in exports. Greenlam is currently trading at a P/E of about 21x its FY2024E earnings. The net earnings CAGR over FY2021-FY2024E is 32%.

    The latest earnings transcript provides valuable information on the operational parameters of the Company.

    The Company has other noted shareholders such as Akash Bhanshali, Akhil Dhawan, Ashish Dhawan, Vallabh Roopchand Bhanshali etc. The stock is also held by Mutual Funds. The promoters hold 54%.

    The stock is up 38% YoY and appears to have a promising future ahead.

    Update 23.06.2022:

    Greenlam has issued a statement that the stake of the Dani Family (Asian Paints Promoter) has increased to 10%. However, they are not looking at board seat. The Company has also stated that it has acquired Gujarat unit and will spend 15 Cr on its development. The unit will have a revenue potential of Rs. 250 Crore. The peak debt is at ₹500-600 Cr in FY24.

    Last edited: Jun 23, 2022