In an earlier piece (“Why Are Savvy Investors Making A Bee-Line For GreenPly Industries?”) it was noted that investors like Ashish Dhawan, Prashant Jain, Sudhir Walia and Westbridge Capital/ Jwalamukhi have taken large stakes in Greenply Industries.
Apart from the wealth of data that is referred to in that piece (such as the reports by Nirmal Bang, ICICI-Direct and the Investors’ Presentation), we also now have the benefit of Daljeet Kohli’s “visit note“. In a crisp note, Daljeet has analyzed the entire business model of Greenply Industries and explained why it is so alluring to the savvy investors. In particular, Daljeet emphasizes that Greenply “is well poised to benefit from the improvement in macroeconomic scenario. Its leadership position would enable to capitalise on the opportunity much faster than its competitors“. He adds that “the key catalyst for financial performance of the company would be improvement in secondary sales of real estate business in both the commercial and residential segments“.
Now, it is notable that Greenlam Industries, the entity formed by the demerger of the laminates division of Greenply, is also attracting attention from savvy investors.
Westbridge Capital a.k.a. Jwalamukhi Investment Holdings is the first to grab a chunk of Greenlam. According to a SAST disclosure, Westbridge/ Jwalamukhi has bought a chunk of 7,26,342 shares of Greenlam on 20th March 2015. Given that the market price on that date was around Rs. 450, the investment is worth about Rs. 33 crore.
It is noteworthy that Westbridge/ Jwalamukhi already held a chunk of 23,76,884 shares of Greenlam which it received on the demerger. With the present acquisition, Westbridge’s holding has surged to 31,03,226 shares, comprising 12.86% of Greenlam’s paid-up equity.
Westbridge has shown the same confidence in Greenply. On an earlier occasion, in addition to its holding of 23,76,884 shares, it bought a further lot of 7,27,975 shares of Greenply.
The result is that Westbridge now holds an identical quantity and percentage (12.86%) in both companies.
This suggests that Westbridge has immense confidence in the business model and management capability of Greenply Industries and Greenlam Industries.
Whether this confidence will translate into huge gains for Westbridge requires to be seen.