AGI Greenpac Drops 19% After SC Rejects Hindusthan Glass Plan

resr 5paisa Research Team

Last Updated: 29th January 2025 - 05:02 pm

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AGI Greenpac shares saw a sharp decline of up to 19% on Wednesday, January 29, after the Supreme Court dismissed the company’s resolution plan for Hindusthan National Glass & Industries Ltd (HNGIL). The verdict comes as a setback to AGI Greenpac, which had secured overwhelming approval from the Committee of Creditors (CoC) for its takeover proposal.

At present, AGI Greenpac Ltd's share price is trading at ₹809, marking a 13.90% drop from its previous close. Investors reacted strongly to the Supreme Court's decision, leading to a sell-off in the company’s shares.

AGI Greenpac had proposed a ₹2,213 crore resolution plan for Hindusthan National Glass, which had been undergoing corporate insolvency proceedings. This plan had received a 98% approval from the CoC in October 2022, signifying strong lender support. However, legal hurdles arose after the Kolkata National Company Law Tribunal (NCLT) initially passed an order on the insolvency case in October 2021. The Supreme Court’s rejection of the resolution plan effectively blocks AGI Greenpac from acquiring Hindusthan National Glass, leaving uncertainty regarding the latter’s financial recovery.

The Supreme Court’s ruling has placed AGI Greenpac in a position where it must reassess its expansion strategy. The company had anticipated that acquiring Hindusthan National Glass would strengthen its market presence in the glass manufacturing sector. However, with this plan now off the table, AGI Greenpac may need to explore alternative growth avenues, including organic expansion or other strategic acquisitions.

During the Q3FY25 earnings call, Group CEO Sandeep Sikka addressed the issue, stating:
"If for any reason the acquisition does not go through, the company has a natural path for organic growth. However, that would be a secondary plan, which has not yet been approved by the Board. At this stage, it is difficult to provide a definitive commitment on alternative strategies."

Despite the setback, AGI Greenpac remains optimistic about its future. President and CEO Rajesh Khosla emphasized that internal discussions are ongoing to determine the next steps. He explained:
"These numbers are still under internal discussion and have not been approved by our Board of Directors. Once the Board gives its approval, we will adhere to SEBI regulations before making any official announcements."

While the Supreme Court's decision disrupts AGI Greenpac’s initial expansion plans, the company is expected to focus on strengthening its existing business operations, enhancing production capacity, and exploring new market opportunities.

Investors and analysts will now closely watch AGI Greenpac’s next course of action, particularly in terms of capital allocation, potential new acquisitions, and strategic investments in the coming months.

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