Kajaria Ceramics gets nod to increase investment limits in plywood business

India's leading ceramic player, Kajaria Ceramics informed in a press release submitted to the stock exchanges that it has received approval for an increase in the limits of investment in Kajaria Plywood (KPPL), its subsidiary, from Rs. 15 crore to Rs. 35 crore, in one or more tranches to meet the future operational expenses and working capital needs of KPPL. The Kajaria Plywood reported revenue of Rs. 16.82 crore and losses of Rs. 6.05 crore for FY19. The higher investment in the plywood business will bring diversification in its product mix.

The proposed investment involves a subscription (acquisition) of the equity shares of KPPL, in which the company presently holds 97.89 per cent shares. Being an existing subsidiary, no entity shall be acquired through this proposed transaction. KPPL is carrying out the business of plywood and related products.

Kajaria's spread via its subsidiaries, is an important step, looking at its muted volume growth during the second quarter of current fiscal. The company saw volume growth of just 1 per cent at the end of the quarter.

The stock price, on Tuesday, touched its intra-day low of Rs. 544. At close its price settled at Rs. 561.1 with gains of 0.84 per cent on BSE.