In Jan’19, we shared a detailed report on Greenply Industries with our members. The stock recommendation was initiated around 130 odd levels and it was also added to our model portfolio.
Recently, on 18th Jul’19, we suggested our members to exit from the stock around 129-130 odd levels.
Now, you would think, what’s so great about buying the stock at 130 and exiting at 129.
Well, the good thing about our investment in Greenply Industries is that we have already taken out the entire money we had invested and we will now get free shares of Greenpanel Industries in the ratio of 1:1, i.e. if we had bought 1000 shares of Greenply, we will now get 1000 shares of Greenpanel Industries.
We expect Greenpanel Industries to list in the range of Rs 25-35 per share which translates into market cap range of 300-400 crore.
Greenpanel Industries will house the entire MDF business and the plywood unit located in Pantnagar (Uttarakhand).
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When we had initiated our recommendation on Greenply Industries, we had made certain estimates for FY 23.
Source: Katalyst Wealth Research
Based on our estimates, we had projected Greenply’s Plywood business market cap to be in the range of 1100-1900 crore. Since we got an opportunity to sell Plywood business (minus Pantnagar unit) at a market cap of Rs 1,600 crore in FY 20 itself, we suggested exiting from Greenply.
As far as MDF business is concerned (which will now be housed in Greenpanel), for the same we had estimated market cap range of Rs 1,200-2,000 crore by FY 23. So, as the same is now going to get listed in the range of 300-400 crore, we believe it may provide a good opportunity for long term investment.
Further, post listing the stock could see some correction as the MDF business is only breaking even at present and the profits will improve gradually with expected improvement in realizations.
You can read the detailed report on Greenply Industries by clicking HERE
Get access to our latest auto-ancillary stock pick by subscribing to one of our Premium Memberships. The new recommendation is also part of our Model Portfolio.
Disclosure: Currently, I don’t have any investment in Greenply Industries. I will get new shares of Greenpanel Industries as a result of my holding in Greenply industries on record-date.
SEBI Registration No. INH100001690
Positive – Expected return of ~15% + on annualized basis in medium to long term for investment recommendations and in short term for Special situations
Neutral – Expected Absolute return in the range of +/- 15%
Negative – Expected Absolute return of over -15%
Coverage closure – No further update on the stock
% weightage – allocation in the subject stock with respect to equity investments
Short term – Less than 1 year
Medium term – Greater than 1 year and less than 3 years
Long term – Greater than 3 years
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