HG Industries Ltd — Merged into Greenlam Industries
In December 2021 I flagged HG Industries at ₹81 (see the dated post above). What made it interesting wasn’t the old business — it was what was about to happen to it. HG was on a path to merge into Greenlam Industries, India’s largest laminate maker. After the merger and a subsequent Greenlam bonus, that ₹81 position is worth roughly 3 times today. Here is the special-situation logic behind the buy.
A cheap door into a quality business
HG Industries was, on its own, an unremarkable shell — but it was being positioned to be absorbed into Greenlam Industries through an NCLT-approved scheme. In effect, buying HG at ₹81 was a cheap, indirect way to become a shareholder of a far higher-quality company. This is special-situation investing: the return doesn’t come from the business improving, but from a defined corporate event — a merger — crystallising value on a fixed ratio.
Why the special situation was attractive
- A defined, event-driven catalyst. The value didn’t depend on hope — it depended on an NCLT-approved merger with a known share-swap ratio.
- An upgrade in business quality. The swap converted a nondescript shell into shares of Greenlam, India’s laminate leader — a genuine step up in quality.
- A bonus on top. After the merger, Greenlam’s 1:1 bonus effectively doubled the share count of the position, adding to the return.
- A margin of safety in the structure. Buying below the effective value of the shares I would receive gave the trade a built-in cushion.
How ₹81 became ~₹240 of Greenlam
The path was mechanical rather than magical: HG shares were swapped into Greenlam shares under the approved scheme, and Greenlam then issued a 1:1 bonus. Adjusting for both, my ₹81 entry is worth roughly ₹240 of Greenlam today — about 3× — and, crucially, I now hold a genuinely good company rather than a shell. That is the quiet beauty of special situations: you engineer the upgrade in advance.
Don’t take my word for it — it’s on the public record
The proof is above: my public Facebook post of 22 December 2021 naming HG Industries at ₹81. The merger into Greenlam and the subsequent bonus are matters of public corporate record.
“Sometimes the best way to buy a great company is through the back door — a cheap shell that is about to become it.”
The lesson for you
HG Industries is my example of special-situation investing: profiting from a defined corporate event rather than from a business slowly improving. Buying a modest shell that was set to merge into India’s laminate leader turned a ₹81 bet into a stake in a quality company — by design, not by luck. (The continuing story is in my Greenlam note.)
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Disclaimer: This article is a personal account of my own past investment decision, shared for educational purposes only. It is not a recommendation to buy or sell this or any stock at current prices. All return figures are calculated to recent market prices and adjusted for stock splits and bonuses; past performance is not a guarantee of future returns. Equity investments are subject to market risks. Please do your own research or consult your financial adviser before investing.
