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Paper sector is undervalued by stock market: BILT
US-based International Paper is set to buy a majority stake in Andhra Pradesh Paper Mills for about USD 257 million in cash. In an interview on CNBC-TV18, RR Vederah, managing director BILT Paper, a unit of India's largest paper maker Ballarpur Industries, said that it's an very interesting deal.
US paper and packaging company International Paper is set to buy a majority stake in Andhra Pradesh Paper Mills for about USD 257 million in cash. In an interview on CNBC-TV18, RR Vederah, managing director BILT Paper, a unit of India's largest paper maker Ballarpur Industries, said that it's an very interesting deal and Andhra Pradesh Paper represents true intrinsic value of the paper industry. He further said that existing management team and employees of AP paper are expected to continue even after the deal.
"The paper market is the fastest growing market, however, paper sector is undervalued by the stock market," he added.
Talking about the Indian paper industry, he said that the paper industry is an organised sector that represents about 40% of the total output in the country. "Players like us are set to grow and dominate the world market," said Vederah.
International Paper, which has raised its quarterly dividend for the third time in 12 months to USD 0.2625 per share, has also agreed to Rs 280 crore non-compete payment to the seller.
Paper stocks have been in limelight after AP-International Paper deal.
BILT Paper growth plans
Recently, BILT Paper said that it has increased its paper production capacity by nearly 90% over the last two years and plans to grow it by another 50% by the end of 2014.
"Indian paper demand is expected to increase significantly throughout the next decade," BILT managing director RR Vederah said in a statement. "The proceeds from the listing will help us to meet this growth in demand."
