By Suhel Khan
While every investor is busy chasing the next big thing, one small-cap company is quietly minting money and sharing it with its investors in the good old-fashioned way: steady, reliable dividends. This under-the-radar company is not just surviving—it is thriving—thanks to enviable capital efficiency. The company squeezes maximum profit out of every rupee they invest as capital and then share the wealth with its investors via huge dividends. In a volatile market, which is like a lifesaving drug.
Could this company be a way of starting hidden income stream? Let us dig in…
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A pioneer in manufacturing of synthetic yarns and industrial rubber products, whose turnaround story is lucrative, this is about Nirlon Ltd.
The company’s current market cap is Rs 4,595 cr and it boasts of a current ROCE (Return on Capital Employed) of about 28%, which beats all its peers in comparison. The industry median is 21%. In simple words, it means that Nirlon makes a profit of 28% on what it invests as capital in the business, or it makes Rs 28 profit on every Rs 100 it invests as capital.
What is interesting about Nirlon is its turnaround story, probably worthy of a Bollywood adaptation.
From 1988 to 2006, Nirlon successfully underwent bankruptcy restructuring and then commenced development of Nirlon Knowledge Park in 2006.
Known today as the Nirlon Knowledge Park (NKP), the property is approximately a 23-acre Information Technology Park located in Goregaon (East), Mumbai. The development of this landmark project began in phases from 2006, with the final phase i.e., Phase V completed in FY22.
The entire Phase- V was leased to JP Morgan Services India Private Limited for a period of 10 years with effect from December 2021. The other big occupants include names like Citibank, Barclays, Deutsche Bank, Morgan Stanley, JP Morgan, ICICI, IBM, Anunta, Starbucks, Subway, etc.
Nirlon Knowledge Park currently has a total chargeable area of approximately 3.06 million square feet.
Nirlon also co-owns 75% undivided interest in ~45,475 sq.
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