Mumbai, March 30: Paper stocks were on fire on the bourses today after International Paper, a US-based paper and packaging company, agreed to buy Andhra Pradesh Paper Mills (APPM) for $423 million yesterday.

Brisk buying came as the foreign company acquired APPM at a significant premium to the market price. According to market circles, investors feel these stocks are undervalued vis-a-vis their potential and are expecting more such deals in the future.

The APPM scrip led the gains among paper mills, rising 20 per cent to close at Rs 236.15. While West Coast Paper Mills surged 17 per cent, or Rs 13.15, to Rs 90, Ballarpur Industries rose 16.38 per cent to Rs 37.65.

JK Paper rose nearly 20 per cent (Rs 9.60) to Rs 57.70. Tamil Nadu Newsprint & Papers rose 9.44 per cent to Rs 133.95.