Aten Papers & Foam Expands with ₹11.78 Cr Stake in Aten Paper Mill

Aten Papers & Foam Limited has approved the acquisition of a 27.40% stake in Aten Paper Mill Limited for ₹11.78 crore.

Acquisition Details

Aten Papers & Foam Limited (APFL) announced that its Board of Directors has approved the acquisition of a 27.40% stake in Aten Paper Mill Limited (APML). The cash deal is valued at approximately ₹11.78 crore. APFL will purchase 2,74,000 equity shares of APML, with each share having a face value of ₹10, at an acquisition price of ₹430 per share. The Share Purchase Agreement (SPA) for this stake purchase was dated March 31, 2026.

Target Company Performance

APML reported a substantial net profit of ₹10.67 crore for FY25 on a turnover of ₹177.65 crore. The company's turnover showed significant growth, increasing from ₹2.49 crore in FY23 to ₹119.45 crore in FY24.

Strategic Rationale

This acquisition is designed to support Aten Papers' strategic goals by expanding its product offerings and market presence through the integration of APML's operations. APFL anticipates leveraging specialized expertise and achieving technological advancements and cost synergies to enhance its competitive advantage in the paper industry.

Company Backgrounds

Aten Papers & Foam Limited, incorporated in early 2019, converted from a private to a public limited company in mid-2024. It specializes in trading Kraft paper and managing waste paper collection and processing in Gujarat. APFL has experienced strong growth, with its net profit increasing by 152.11% in the last year.

Aten Paper Mill Limited was incorporated in August 2020 and is involved in the manufacture of paper and paper products. Notably, members of the Lakhani family, including directors Mohamed Arif Mohamed Ibrahim Lakhani and Zuned Lakhani, hold positions in both APFL and APML.

Operational Impact

The acquisition will give Aten Papers & Foam Limited a significant minority stake in Aten Paper Mill Limited, allowing for closer operational alignment. APFL will gain access to APML's manufacturing capabilities and market presence within the paper sector. Opportunities exist to realize cost and operational synergies by integrating APML's business into APFL's strategy, which could lead to an enhanced product portfolio and broader market reach for the combined operations.

Potential Risks

Several factors require monitoring. Aten Papers & Foam Limited relies on a few key customers, posing a risk if these relationships change. The company and its related entities face ongoing litigations that could affect business and reputation. Establishing new waste paper processing units introduces operational risks. APFL has also faced a prior trademark objection, and past instances of delayed statutory filings require continued attention. The success of the acquisition itself depends on effective integration and the realization of projected synergies.

Industry Landscape

Aten Papers & Foam's move to acquire a stake in Aten Paper Mill is a step towards scaling operations in the competitive Indian paper industry. Larger players in the sector include JK Paper Limited, West Coast Paper Mills Limited, Seshasayee Paper and Boards Limited, and Andhra Paper Ltd., which serve as benchmarks for market share and operational efficiency.

Looking Ahead

Investors and stakeholders will be tracking progress on the conditions precedent outlined in the Share Purchase Agreement, receipt of all necessary regulatory and board approvals, and APFL's detailed integration plans for realizing expected synergies. The impact of the acquisition on APFL's consolidated financial statements and operational performance, along with future strategic announcements, will also be key watchpoints.