Nandini Modi and Kirit Modi, together with their persons acting in concert (PACs), have launched a mandatory open offer to acquire up to 26% of the voting share capital of South India Paper Mills . The acquirers intend to purchase up to 48,75,000 fully paid-up equity shares at an offer price of ₹120 per share, representing a total potential consideration of ₹58.5 crore assuming full acceptance from public shareholders.

The open offer was triggered by a separate underlying transaction involving a share purchase agreement (SPA) dated August 18, 2026. Under this agreement, the acquirers agreed to acquire 37,90,240 equity shares, constituting 20.21% of the voting share capital, from selling shareholders Harshad Natvarlal Modi and Rajul Harshad Modi. The consideration for this block deal is fixed at ₹45.48 crore, also priced at ₹120 per share. Upon completion of the SPA and the open offer, the acquirers and their PACs will assume control over the target company and be classified as part of the promoter and promoter group.

Offer Structure and Pricing

The open offer is compliant with Regulations 3(1) and 4 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. The offer price of ₹120 per share has been determined in accordance with SEBI SAST Regulations and may be revised as per regulatory provisions. The payment for the open offer will be made entirely in cash. The tendering period for public shareholders to accept the offer will span 10 working days, with specific dates to be disclosed in the forthcoming Letter of Offer.

Acquirer Shareholding Pattern

The acquirers and their PACs currently hold a combined stake of 19.17% in the company. Following the completion of the underlying transaction (excluding shares acquired through the open offer), their aggregate holding will rise to 39.39%. The group includes individuals such as Sachin Kirit Modi, Swapnil Kirit Modi, Riddhi Sachin Modi, Bhuvi Swapnil Modi, Rihaan Sachin Modi, and entities including Rigid Containers Private Limited and Fortune Packaging LLP.

Selling Shareholders Exit

The selling shareholders, Harshad Natvarlal Modi and Rajul Harshad Modi, will cease to hold any equity shares in the company upon the consummation of the SPA. Harshad Natvarlal Modi currently holds 25,40,240 shares (13.55%), while Rajul Harshad Modi holds 12,50,000 shares (6.67%). Both sellers are not part of the promoter group.

Regulatory Compliance and Control

Indcap Advisors Private Limited has been appointed as the Manager to the Open Offer. The acquirers have confirmed adequate financial resources to meet the offer obligations. The transaction is subject to customary conditions precedent under the SPA and necessary statutory approvals. The acquirers have undertaken to ensure that the target company maintains the minimum public shareholding required under the Securities Contracts (Regulation) Rules, 1957, and SEBI LODR Regulations, 2015, post-transaction. There is no intention to delist the company's equity shares.

South India Paper Mills reported a net profit of ₹497.79 lakh for the quarter ended June 30, 2026, marking a substantial recovery from the ₹98.16 lakh profit recorded in the corresponding quarter of the previous year. The surge in profitability was driven by a 10% increase in revenue from operations to ₹11,758.39 lakh, while total expenses grew by only 5.1%. This operational leverage suggests improved cost control or favorable input price dynamics relative to selling prices. The results were approved by the Board of Directors at a meeting held on July 30, 2026.

The company’s total income stood at ₹11,775.83 lakh, with operational revenue accounting for the vast majority of inflows. Other income contributed a marginal ₹17.44 lakh. On the expense side, total costs amounted to ₹11,110.49 lakh. Cost of materials consumed was ₹6,500.81 lakh, while employee benefit expenses totaled ₹915.13 lakh. Finance costs decreased to ₹457.80 lakh from ₹510.12 lakh in the prior year period, indicating improved interest burden management.

Financial Performance Highlights

The profit before tax surged to ₹665.34 lakh from ₹131.21 lakh in the previous year. Tax expenses included a deferred tax credit of ₹167.55 lakh, contributing to the bottom-line improvement. Earnings per share (basic and diluted) rose to ₹2.65 from ₹0.52 in the corresponding quarter of FY26.

What the Numbers Show

The primary driver of the profit surge is the divergence between revenue growth and expense growth. While revenue increased by approximately 10% year-on-year, total expenses grew by only 5.1%. This operational leverage suggests better cost control or favorable input price dynamics relative to selling prices. Specifically, finance costs declined despite stable revenue levels, reducing the drag on profitability. The company operates in a single segment, Paper and Paper Products, meaning these results reflect consolidated performance without diversification offsets.

Regulatory Disclosures

The results have been subjected to a limited review by B S Ravikumar & Associates, Chartered Accountants, Mysore, pursuant to Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Audit Committee reviewed the accounts before Board approval. The company noted that its existing employee emolument structure is broadly in line with the New Labour Codes notified by the Government of India on November 21, 2025, and no material impact is currently envisaged. There were no pending investor complaints at the beginning or end of the quarter, with three complaints received and resolved during the period.