ITC acquires ABRE's Century Pulp and Paper division; Nomura sees up to 33% potential upside

ITC shares in Tuesday's trade (April 1, 2025) zoomed over 1 per cent to the day's high price of Rs 414.15 per share on the BSE. The gains in the stock came as the company acquired Aditya Birla Real Estate’s Century Pulp and Paper division for Rs 3,498 crore. This acquisition will help the company expand its footprint in the north.

"..pursuant to approval of the Board of Directors of the Company at the meeting held today i.e. 31st March, 2025, the Company has entered into a Business Transfer Agreement (‘BTA’) with Aditya Birla Real Estate Limited (‘ABREL’) for acquisition of ABREL’s pulp and paper business operated under the name of ‘Century Pulp and Paper ’ (CPP), along with the assets, liabilities, contracts, employees etc. (‘Undertaking’), as a going concern on a slump sale basis, subject to the conditions precedent specified in the BTA," said the company in a filing with the exchanges.

Established in 1984 at Lalkuan (Nainital, Uttarakhand), CPP is a well-established player in the Indian Paper industry with an installed capacity of 4.8 lakh MT per annum. The acquisition is in line with the Company’s strategy to drive the next phase of growth in its Paperboards and Specialty Papers Business by expanding capacity at a new location, given the limited scope for expansion at the existing facilities.

Add Zee Business as a Preferred Source

The completion of the aforesaid acquisition is subject to approval from (i) the Competition Commission of India; (ii) Ministry of Environment, Forest and Climate Change, Government of India; and (iii) any other authority as may be necessary. 6. Indicative time period for completion of the acquisition The transaction is expected to be consummated in about 6 months, subject to receipt of statutory approvals and fulfilment of the conditions laid down in the BTAAnalysts see the deal to bode well for ITC's paper business.

The consideration of the deal is pegged at Rs 3,500 crores on a cash-free debt-free basis, payable on closing, subject to adjustments in accordance with the terms and conditions set out in the BTA

Brokerages on ITC

JP Morgan on the conglomerate remains 'overweight', with the target cut to Rs 475 from the earlier Rs 505 per share.

Also, Nomura, meanwhile, has continued with its 'buy' call with the target pegged at Rs 543.96 per share, implying gains of 33 per cent from the previous close.