Tamil Nadu Newsprint & Papers Ltd

- There is no proposal for a buyback of shares this year as the company needs funds for regular maintenance CAPEX, new projects, and loan repayments. - The company plans to repay around Rs. 400 crores of loans on earlier projects during the current year. - Capital expenditure of about Rs. 50 crores is planned for normal CAPEX. - A significant investment of around Rs. 875 crores is planned for the Mill Expansion Plan (MEP) Unit II pulp mill expansion. - Due to these huge funding requirements combined with cash flow pressures from the Covid-19 outbreak, the company is conserving funds and not paying interim dividends. - No requests or plans for bonus shares or equity fundraising have been indicated. - Overall, the company is focusing on managing existing debt and funding expansion through internal accruals and loan repayments without announcing fresh equity or debt fundraising.

- The company has a Mill Expansion Plan (MEP) in Unit II to increase mill capacity from 200,000 MT to 365,000 MT per annum of Multilayer Coated Paper Board. - This includes installation of a state-of-the-art Paper Machine with 165,000 MT per annum capacity and a 400 tons per day chemical hardwood pulp mill with chemical recovery boiler and wastewater treatment plant. - Total capital outlay for this expansion is Rs. 2,520 crores. - Overall paper and packaging board production capacity post-expansion will increase to 765,000 MT per annum from the current 600,000 MT. - The company plans to spend about Rs. 875 crores for MEP Unit II pulp mill expansion. - Around Rs. 50 crores are planned for normal capex (maintenance and upgrades). - The company has significant loan repayment obligations (~Rs. 400 crores) in the current year, impacting available funds for buybacks or dividends.

- Per capita paper consumption in India is expected to rise from 14 kgs to 17 kgs by 2024-25, indicating growth potential. - Increased use of packaging board in the pharma industry due to the plastic ban and rise in e-commerce home deliveries. - Growth in packaging boards estimated at 10-12% per annum, with strong demand from pharma, FMCG, and e-commerce sectors. - Printing and writing paper demand expected to recover as schools, colleges, and offices resume normal operations post-Covid-19. - Digitalization and growing literacy rates contribute to long-term demand growth, despite short-term Covid impacts. - Expansion projects (MEP Unit II) will increase production capacity from 6,00,000 MT to 7,65,000 MT annually, driving volume growth. - Optimism that fading Covid-19 pandemic will lead to normalization and trigger volume and revenue growth.

- Covid-19 severely impacted printing and writing paper demand, with order flows dipping from 1.20 lakh MT (2018-19) to 41,000 MT in peak pandemic period, but packaging boards and cement sales remained resilient. - Packaging board demand expected to grow at 10-12% annually driven by pharma industry, e-commerce growth, and ban on single-use plastics. - Per capita paper consumption in India projected to rise from 14 kgs to 17 kgs by 2024-25, indicating growth potential. - Capacity expansion underway: Mill Expansion Plan in Unit II will increase production capacity from 6,00,000 MT to 7,65,000 MT per annum, including a 400 tpd chemical pulp mill and 30 MW power plant. - The company anticipates recovery in printing/writing paper demand with reopening of schools, colleges, and corporate activities. - Despite challenges, management remains positive on volume growth as economic activities normalize post-pandemic. - Large ongoing capital expenditures (~Rs. 875 crores for expansion) and loan repayments constrain interim dividends and share buybacks, focusing resources on growth.

- During the peak Covid-19 period from April to August, order flow for printing and writing paper dipped significantly. - Order quantities comparison: - April-August 2018-19: 1.20 lakh metric tonnes - April-August 2019-20: 83,000 metric tonnes - April-August 2020-21: 41,000 metric tonnes - Printing and writing paper segment severely impacted, while paperboard and cement sales were relatively stable. - Demand for cut size papers is expected to normalize faster than other sectors due to printing needs during the pandemic. - Packaging board demand sustained and expected to grow, especially in pharma industry and via e-commerce channels. - Per capita paper consumption in India, currently at 14 kgs, is expected to increase to 17 kgs by 2024-25, indicating growth potential.