A penny stock trading below Rs.5 came into focus after Morgan Stanley Asia Singapore Pte offloaded around 25 lakh shares, valued at approximately Rs.9.62 crores. The large transaction has sparked investor interest, with market participants closely tracking the stock’s movement amid rising volatility in the broader penny stock space.
Price Movement
During Tuesday’s trading session, shares of Kesoram Industries Ltd reached an intra-day high of Rs.3.86 apiece, rising 2 percent from its previous closing price of Rs.3.79 apiece.
Block Deal
Morgan Stanley Asia Singapore Pte recently sold 25,17,721 equity shares of the company through a bulk deal, with the transaction executed at an average price of Rs.3.82 per share, amounting to a total deal value of approximately Rs.9.62 crore.
This significant offloading by a prominent institutional investor has drawn market attention, raising questions about the stock’s near-term outlook. The move also comes amid heightened volatility in penny stocks, prompting retail investors to closely monitor developments surrounding the company.
Business Overview
Established in 1919 as Kesoram Cotton Mills Limited in Kolkata, West Bengal, Kesoram Industries Limited (KIL) is one of India’s oldest and most diversified industrial enterprises. While it began with a focus on cotton textiles, the company gradually expanded its presence across multiple sectors such as rayon, tyres, cement, and transparent paper.
Business Verticals
Kesoram Industries Limited has operated across several business segments over its long history. It entered the tyre business in the 1960s under the “Birla Tyres” brand, with manufacturing plants in Odisha and Uttarakhand. Its cement division, marketed as “Birla Shakti” and “Vasavadatta Cement,” had major plants in Karnataka and Telangana with a combined capacity of 7.25 million MT. In 2023, Kesoram announced the sale of its cement business to UltraTech Cement for Rs.5,379 crore, expected to conclude by 2024.
The rayon division, set up at Tribeni, West Bengal, produces viscose rayon filament yarn and cellophane paper under the “Kesoram Rayon” and “Kesophane” brands, with a capacity of 6,500 MT annually and a workforce of over 2,700. Kesoram is also among the leading producers of viscose staple fiber in India. In the past, the company ventured into manufacturing cast iron spun pipes, and pipe fittings, and briefly explored coal mining through a joint venture in 2012.
Manufacturing Capacity
Kesoram Industries Limited (KIL) operated two integrated cement manufacturing plants — one at Sedam in Karnataka, with a clinker capacity of 5.1 MTPA and cement grinding capacity of 9.0 MTPA, and another at Basantnagar in Telangana, with a clinker capacity of 1.2 MTPA and cement grinding capacity of 1.8 MTPA.
Together, the plants have a combined clinker capacity of 6.3 MTPA and a cement grinding capacity of 10.8 MTPA. The cement business of KIL is set to be transferred to UltraTech Cement Limited (UCL) effective March 1, 2025, following the receipt of necessary regulatory approvals.
Financial Performance
In its latest financial update, Kesoram Industries Ltd reported consolidated revenue of Rs.67 crores for Q3 FY25, reflecting a 4 percent decrease from Rs.70 crores in Q3 FY24. However, the company’s net profit surged exceptionally to Rs.5,766 crores, rising from a net loss of Rs.241 crores in the same period last year, due to a surge in other incomes of Rs.5,805
Written by – Siddesh S Raskar
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