Jayanta Mallick

Kolkata , Oct. 21

A BLOCK deal involving 3.26 lakh shares on the NSE indicated some churning in the institutional investment in the Paper Products' stock. The stock finished 5.63 per cent up at Rs 229. The deal was struck at Rs 228 and represented almost the total traded volume in the counter on the NSE.

According to market sources, one may not read much into the deal in this counter, not known for liquidity. "But the Rs 65 crore proposed consumer packing project is attracting investors' attention," an analyst with an institutional brokerage said.

Mr Ravi Chidambaram, Finance Controller of the company, told Business Line that the board of directors would meet and finalise the project next week. It is understood that the company is likely to locate the new facility in Himachal Pradesh or Uttaranchal. Mr Chidambaram said that the new project would be value proposition for the company and is being taken up to achieve double-digit top and bottomline growth.

The project is likely to be completed in the next 18 months in phases and the first phase would be completed by the middle of 2006. The company has four production facilities at Thane, Silvassa, Hyderabad and Nagpur. The fifth facility would be for serving the northern region customers.

The foreign promoters, Huhtavefa BV, hold 58.92 per cent, while the Indian promoters, including the Managing director, Mr Suresh Gupta, have a stake of around 4.82 per cent.

Among the institutional investors, as on September 30, 2005, were HDFC Trustee Co (1.82 per cent), New India Assurance (1.64 per cent), Aberdeen Asset Managers (7.92 per cent), Merrill Lynch Capital Markets Espana SA (2.17 per cent) and FID Funds Mauritius (2.28 per cent).

According to the NSE data, Fidelity sold 2.85 lakh shares of Paper Products at Rs 228 each and Templeton Mutual Fund bought 3.25 lakh shares at Rs 229 on Friday.

At today's closing, the stock traded at 13 times its trailing 12-month earnings.

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