Key Quantitative Figures

  • Offer Size: Up to 48,75,000 equity shares (26% of voting share capital)
  • Offer Price: ₹120 per fully paid-up equity share
  • Maximum Consideration: ₹58,50,00,000 (assuming full acceptance)
  • Underlying Transaction: Acquisition of 37,90,240 shares (20.21%) from sellers for ₹45,48,28,800
  • Current Public Shareholding: 53.01% (99,38,414 shares)
  • Post-Offer Public Shareholding: 6.79% (12,73,174 shares) assuming full acceptance
  • Escrow Amount Deposited: ₹14,63,00,000 (25%+ of offer consideration)
  • Market Price Reference: ₹116.50 (October 12, 2026 closing on BSE)

Dates of Action

  • Share Purchase Agreement Date: August 18, 2026
  • Public Announcement Date: August 18, 2026
  • Detailed Public Statement Date: August 25, 2026
  • Identified Date: October 07, 2026 (for shareholder determination)
  • Tendering Period: October 22, 2026 to November 04, 2026
  • Payment Deadline: Within 10 working days of tendering period closure
  • Transaction Long Stop Date: 26 weeks from open offer closure date

Parties Involved

Acquirers:

  • Nandini Modi (Acquirer 1) - Current holding: 5,36,817 shares (2.86%)
  • Kirit Modi (Acquirer 2) - Current holding: 3,05,800 shares (1.63%)

Persons Acting in Concert (PACs):

  • Sachin Kirit Modi, Swapnil Kirit Modi, Riddhi Sachin Modi, Bhuvi Swapnil Modi, Rihaan Sachin Modi, Rigid Containers Private Limited, Fortune Packaging LLP

Sellers:

  • Harshad Natvarlal Modi: Selling 25,40,240 shares (13.55%)
  • Rajul Harshad Modi: Selling 12,50,000 shares (6.67%)

Manager to Offer: Indcap Advisors Private Limited

Registrar to Offer: KFin Technologies Limited

Escrow Bank: ICICI Bank Limited

Buying Broker: Nikunj Stock Brokers Limited

Purpose and Rationale

The primary objective is substantial acquisition of equity shares and voting rights along with acquisition of control of Target Company. The acquirers intend to position the company for enhanced operational efficiency and long-term value creation.

Financial and Operational Impact

  • Change in Control: Acquirers and PACs will acquire control and be classified as promoters
  • Minimum Public Shareholding: Risk of falling below 25% requirement; acquirers undertake to facilitate compliance
  • Board Changes: Kirit Modi to be appointed as Non-Executive Director, Sachin Kirit Modi as Executive Director upon completion
  • Employee Structure: No present intention to make material changes to existing employee structure
  • Asset Disposal: No plans to dispose of material assets except in ordinary course of business

Capital Structure Impact

  • Pre-offer Acquirer+PAC holding: 35,94,976 shares (19.17%)
  • Post-SPA holding: 73,85,216 shares (39.39%)
  • Post-offer holding (full acceptance): 1,22,60,216 shares (65.39%)
  • Dilution: No new shares issued; existing share capital structure unchanged

Cash Flow Implications

  • Outflow: Maximum ₹58.50 crore for open offer consideration + ₹45.48 crore for SPA consideration
  • Funding Source: Acquirers' liquid assets (no borrowing involved)
  • Liquid Assets Certification:
  • Nandini Modi: ₹343.09 crore as of August 10, 2026
  • Kirit Modi: ₹82.83 crore as of August 10, 2026

Risk Factors

Underlying Transaction Risks:

  • Non-compete dispute with JK Paper Limited regarding former HPPL shareholders (valid until May 16, 2029)
  • Potential legal proceedings that may delay or prevent transaction completion
  • SPA termination rights under certain conditions

Open Offer Risks:

  • Proportionate acceptance if oversubscribed
  • Withdrawal rights under Regulation 23 if statutory approvals not received
  • Delayed payment interest obligation at 10% p.a. for non-statutory delays
  • Past compliance delays: 5 instances of delayed Regulation 29(2) disclosures in FY2025-26 (157-367 days delay)
  • Litigation risk potentially delaying offer process
  • Physical share tendering complexities and documentation requirements

Acquirer Risks:

  • No assurance on future company performance
  • Minimum public shareholding compliance requirement
  • Continued non-compete dispute with JK Paper

Taxation Aspects

  • STT payable at 0.10% on both purchase and sale
  • Different tax treatments for resident vs. non-resident shareholders
  • Capital gains tax implications based on holding period
  • Withholding tax obligations for non-resident shareholders
  • Documentation requirements for tax compliance

Settlement Procedure

  • Stock exchange mechanism through BSE acquisition window
  • Demat shares: Through selling brokers with early pay-in
  • Physical shares: Submission of original documents to registrar
  • Settlement through clearing corporation similar to secondary market
  • Lien marking on tendered shares until acceptance finalization

Conditions and Approvals

  • No Minimum Acceptance: Offer not conditional on minimum acceptance
  • Statutory Approvals: None required as of date, but subject to any that may become applicable
  • Competing Offer: No competing offer as of date
  • Withdrawal Conditions: As per Regulation 23(1) of SAST Regulations

Financial Arrangements

  • Firm financial arrangements through acquirers' liquid assets
  • Escrow account with ICICI Bank with ₹14.63 crore deposit
  • CA certification for financial adequacy received
  • No borrowing from banks or financial institutions

Target Company Background

  • Business: Manufacturing of paper, paperboards and corrugated packaging
  • Listed: Only on BSE (Scrip Code: 516108)
  • Authorized Capital: ₹20 crore (2 crore shares of ₹10 each)
  • Paid-up Capital: ₹18.75 crore (1.875 crore shares)
  • Financial Performance:
  • FY2026: PAT ₹10.74 lakh vs FY2025: Loss ₹9.64 lakh
  • FY2024: Loss ₹13.43 lakh
  • Board Composition: 12 directors including 5 independent directors
  • Public Shareholding: 4,606 shareholders as of October 09, 2026