The Hindu Business Line : Kojam Fininvest gains 140% — Unlocking value thru Gujarat Glass

THE stock price of investment company Kojam Fininvest Ltd (Kojam), part of Piramal Enterprise, is on a rise since it got listed last month and in the last 8 trading sessions it has gained 140 per cent.

The shares of Kojam were listed on June 24 at around Rs 17 on the NSE and the BSE. The stock price moved in a narrow range till July 15 when it closed at Rs 20.15 on the NSE. But after this, the stock has moved in northward direction and today it closed at Rs 47.95 on the NSE. The stock is also listed on the BSE and the Ahmedabad Stock Exchange. Average trading volumes both on the NSE and the BSE is around 20,000-25,000 shares. However, in today's trading the stock was down 4.96 per cent at Rs 47.95 on the NSE.

Brokers said the stock price is on the rise due to the unlocking of the company's value through its investment in Gujarat Glass. Kojam is an investment company and its main source of income is dividend from Gujarat Glass.

"The stock price is on a rise mainly due to the good growth potential for Gujarat Glass business," said an analyst with a domestic broking firm. Moreover, these shares were given to the shareholders of Nicholas Piramal free of cost, and so the market views this company as investor-friendly, he said.

Shareholders of Nicolas Piramal were allotted one share of Kojam for every 4 shares held of Nicholas following the transfer of holding of Gujarat Glass to Kojam earlier this year. Kojam holds 53.76 per cent stake in Gujarat Glass. Transfer of holding was done so that Nicholas Piramal remains a pure pharma company.

Gujarat Glass is a manufacturer of medium to small size glass containers for the pharmaceuticals and cosmetic industry. It manufactures a wide range of glass bottles and jars, in sizes ranging from 2 ml to 2.5 litres. The client's list includes Hindustan Lever, Revlon, Loreal and Avon for cosmetics. It also supplies bottles to multinational and Indian pharmaceutical companies.

For the financial year ended March 2003, Gujarat Glass reported net profit of Rs 5.47 crore on sales of Rs 225.18 crore.