Orient Paper & Indsutries
BSE Code: 502420 Volume: 76752 CMP: Rs 69
The demerger of its cement business into a new wholly-owned subsidiary, Orient Cement (OCL), remains a key trigger for Orient Paper & Industries. The approval process for the demerger is on track, with the scheme of arrangement having been approved by the Orissa High Court on July 27, 2012. Expected to become effective by October 2012, the demerger will create a pure play cement company that triggers the much-awaited value unlocking process. It will ensure that cash flows from the cement business can be dedicatedly used to fund the growth of the business rather than to support the losses of the paper division.
The commissioning of a 25 MW captive power plant in August 2012 and the remaining 35 MW (of the total 55 MW) by September 2012 is expected to result in substantial reduction in the division’s cost in H2FY13. One can look at the stock from a medium to long-term trading perspective.*To get the password for buy calls, please subscribe to this blog. You will receive the password in next email to you*