Subam Papers revised its project cost to ₹104.37 crore from ₹107.04 crore following an under-subscription in its preferential issue. The company raised ₹74.36 crore against the targeted ₹107.04 crore, resulting in a shortfall that necessitated a reduction in the allocation for General Corporate Purposes. The funds were initially intended for debt repayment, investment in a subsidiary, and general corporate purposes.

The Board of Directors had previously approved the fund raise on November 14, 2025, and shareholders endorsed the plan at an Extra-Ordinary General Meeting on December 10, 2025. The preferential issue comprised 26,32,800 Convertible Warrants and 44,09,600 Equity Shares, both priced at ₹152.00 each. The warrants were allocated to the Promoters and Promoter Group, while the equity shares were offered to Non-Promoter (Public) category investors.

Fund Utilisation and Shortfall

The company received ₹64.36 crore against the proposed ₹67.02 crore from the preferential issue of Equity Shares due to under-subscription. Additionally, ₹10.00 crore was received against Convertible Warrants, representing 25% of the total warrant issue proceeds. The total proceeds of ₹74.36 crore fell short of the targeted ₹107.04 crore, leading to a ₹2.66 crore deficit in the equity issue proceeds.

In response, the Board of Directors, at a meeting on May 26, 2026, revised the project cost and fund utilisation plan. The allocation for General Corporate Purposes was reduced from ₹4.03 crore to ₹1.36 crore. The overall project cost was adjusted downward from ₹107.04 crore to ₹104.37 crore to align with the actual funds raised.

Revised Fund Allocation

The revised utilisation of the proceeds is as follows:

The investment in the wholly-owned subsidiary, Subam Paper and Boards Private Limited, is intended for setting up a Corrugated Box Unit. The company informed the BSE Limited of the revision on May 27, 2026.

Subam Papers Limited has announced the commencement of commercial production at its new automated Kraft paper manufacturing facility through its wholly owned subsidiary, Subam Papers and Boards Private Limited. The facility, located in Vaduganpatti Village, Tirunelveli, Tamil Nadu, represents a significant milestone in the company's strategic expansion plans.

Major Capacity Expansion Achievement

The completion of this state-of-the-art facility marks a transformative phase for Subam Papers Limited. The new automated plant incorporates the latest manufacturing technology, ensuring higher efficiency, superior product consistency, and greater operational flexibility. Full automation across the production process minimizes human error, reduces turnaround times, and significantly enhances the company's ability to service large-volume and quality-sensitive customers.

The expansion represents an overall capacity increase of approximately 70.97%, with Kraft paper manufacturing capacity growing by 96.78% from 1,32,000 MTPA to 2,59,750 MTPA.

Strategic Product Diversification

A defining feature of the new facility is its capability to manufacture Kraft paper in the 80-120 GSM (Grams per Square Metre) range. This specific GSM band serves as the primary raw material for paper carry bag manufacturing, a product category experiencing exponential demand growth across India driven by legislative, environmental, and consumer-led forces.

Market Opportunity in Paper Carry Bags

India's paper carry bag industry presents significant growth potential:

The demand stems from multiple high-growth sectors including retail and organized trade, e-commerce and quick commerce, food and beverage delivery, pharmaceuticals and healthcare, and FMCG companies transitioning to paper packaging solutions.

Energy Self-Sufficiency Initiative

Subam Papers is implementing a co-generation (COGEN) power plant under its subsidiary, expected to be commissioned by June 2026. This strategic infrastructure addition will dramatically improve the company's energy independence.

The COGEN plant will reduce external power purchases by 75.00%, from 20 Lakh Units to just 5 Lakh Units per month, providing significant cost savings and operational stability.

Strategic Advantages and Outlook

The management highlighted several key strategic advantages from this expansion:

• Revenue Potential: Near-doubling of revenue ceiling through substantial capacity increase
• Premium Positioning: Entry into high-growth, high-margin downstream segment with 80-120 GSM paper
• Regulatory Support: Strong regulatory moat from India's progressive ban on single-use plastics
• Scale Benefits: Enhanced competitive position among India's larger integrated Kraft paper manufacturers
• Diversification: Access to new customer segments including carry bag manufacturers and branded packaging companies

The company's management expressed confidence in the strategic direction, emphasizing that the successful commissioning marks the beginning of a significantly larger chapter for Subam Papers Limited. With consolidated capacity reaching 3,07,750 MTPA and a product portfolio aligned with India's fastest-growing paper packaging segments, the company is positioned to deliver sustainable long-term value to stakeholders.