Greenlam Industries shares drop due to ex-bonus adjustment

Shares of Greenlam Industries Ltd saw a significant drop today, falling by up to 50% on some trading apps. This decline is due to the company’s shares turning ex-bonus, as the firm recently announced a bonus issue for its shareholders in a 1:1 ratio. Greenlam’s board had decided on the bonus shares on January 30, 2025, with March 21, 2025, set as the record date for determining eligible shareholders. This means that eligible shareholders will receive one new share for every existing share they own. Before this adjustment, shares were priced at Rs 592. Following the bonus issue, shares opened at Rs 277 on Friday. Some trading platforms may still reflect the old prices, leading to an apparent 55% drop in share value. After the adjustment, shares fell to Rs 272, with the company's market cap now over Rs 7,500 crore. Although the stock is down from its adjusted 52-week high of Rs 331, it remains 36% above its low of Rs 217.85 earlier this month. Greenlam Industries has experienced a remarkable rise, with shares increasing nearly 620% over five years. The stock came from a low of Rs 92 in March 2020 to a high of Rs 662. Despite this, the company reported a 44% drop in net profit during the December 2024 quarter and a modest increase in sales. Analysts have mixed opinions on the stock. Anand Rathi still maintains a 'buy' rating but has lowered its target price to Rs 771, while Antique Stock Broking shares a similar stance with a target of Rs 650. In contrast, YES Securities and BoB Capital Markets have downgraded their ratings, citing concerns over future profitability and demand. Greenlam Industries is a leading manufacturer of laminates and offers various products globally. However, analysts warn of potential challenges in maintaining growth due to market dynamics and costs.