Greenlam Industries surges 7% on stock split, Rs 950-crore capex plan

The company aims to invest Rs 950 crore over a period of 2-3 years, towards setting up of third laminate plant and foray into plywood and particle board business

Shares Greenlam Industries hit a new high of Rs 1,799.45, up 7 per cent on the BSE in Tuesday's intra-day trade, after its board approved the sub-division/split of face value of equity shares of the company having face value of Rs 5 each to Re 1 each. The company also announced entry into plywood and particle board business and to set up its third laminate plant.

In the past one week, the stock has surged 22 per cent, as compared to a 2-per cent rise in the S&P BSE Sensex. Further, in the past one year, it has more-than-doubled or has risen 118 per cent, as against a 26-per cent gain in the benchmark index.

Greenlam Industries said the rationale behind stock split was to encourage wider participation of retail investors by making the equity shares more affordable for them and to enhance the liquidity of equity shares of the company in the stock markets.

The company, among the world's top 3 laminate manufacturer, announced prominent plans for a fast-tracked expansion. It aims to invest Rs 950 crore over a period of 2-3 years, towards setting up of third laminate plant and foray into plywood and particle board business.

"Witnessing a spiral demand in the wood panel segment, the company has taken the next leap and decided to expand its portfolio by venturing into two adjacent categories - plywood and particle board and also setting up third laminate plant. This expansion will position Greenlam from a decorative surfacing company to a leading integrated wood panel player," the company said.

It further said the investments in third Laminate plant and Particle Board will be done under Greenlam South Limited, a 100 per cent subsidiary of Greenlam Industries Limited based at Naidupeta, in Andhra Pradesh. The dedicated Plywood manufacturing facility will come under the newly acquired subsidiary HG Industries Limited based at Tindivanam, Tamil Nadu, having a capacity of 18.9 mn sqm. per annum with a capex of Rs 125 crore, it added.

Greenlam expects to commence the commercial production of plywood & laminate by Q4FY23 and particle board by Q4FY24.