The Telegraph
Since 1st March, 1999
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Calcutta broker hungry for Sirpur

Calcutta, Aug. 18: CD Equisearch, a Calcutta-based equity brokerage, is trying to gain a near 10 per cent stake in Sirpur Paper Mills Ltd — a Hyderabad-based paper firm that earned Rs 202 crore in net sales and registered a net profit of Rs 12.5 crore last year.

CD Equisearch owns 3.54 per cent of the company’s shares at present, and is bidding for the 5.29 lakh shares that are being sold by the Andhra Pradesh (AP) government.

If the Calcutta-based brokerage manages to scoop up AP government’s stake, it will gain control of nearly 10 per cent of Sirpur Paper’s shares.

Chandravadan Desai, owner of the brokerage, confirmed his firm’s bid for the shares. “We consider Sirpur Paper a value investment,” he explained.

Sirpur Paper is currently trading at around Rs 63, or at a price-earning (P/E) multiple of a little over four. (Its earning per share in 2002-03 was Rs 14.95.)

The market, however, sees an interesting twist in CD Equisearch’s move to build a substantial holding in the company.

Desai is known to be close to Sree Kumar Bangur and his family — the founders of West Coast Paper. Desai and his firm together hold a little over 7 per cent in the Bangur-promoted paper firm.

“The promoters of Sirpur Paper — the Poddars — hold 48 per cent in the company. Besides, they are known to be quite close to the Bangurs and are hence not intimidated,” said a senior broker.

Nevertheless, the Poddars, too, have put in a bid for the AP government’s stake, said a director on the board of Sirpur Paper.

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