The scrip of Andhra Pradesh Paper Mills Ltd has hit the upper circuit for the second consecutive day, following the proposal of the US-based International Paper to acquire 53.5 per cent of the L.N. Bangur family stake for $257 million with a proposal for additional payout of $62 million to the promoters.

International Paper has also announced its plans to hike the total stake in APPM to 75 per cent by seeking additional 21.5 per cent stake from the market through an open offer.

The company scrip touched a 52-week high of Rs 283.35, up Rs 47.20 in the early trade itself, up 19.90 per cent over previous day's close of Rs 236.15.

“We like to highlight that the valuations offered in the APPM deal is likely to trigger a re-rating of all the paper companies in India since current valuations of Indian paper companies are substantially lower than the deal multiples. Currently, paper companies are trading at average EV/EBITDA of 5.2x, MCap/net sales of 0.5x and P/E of 6.7x based on FY 2011 estimates,” Mr Rohan Gupta of Emkay Global, said in a research report.

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