TNPL to Invest Rs 600 Crore in Tissue, Power Upgrade

Tamil Nadu Newsprint and Papers Limited (TNPL) is deploying Rs 600 crore across two capital projects, a new tissue paper plant and a revamp of its steam and power system, with both expected to be commissioned by the third quarter of FY27, the company confirmed on September 23, 2026.

The tissue paper plant, with a capacity of 34,000 tonnes per annum, carries a project cost of Rs 350 crore, funded through Rs 270 crore in debt and Rs 80 crore of internal accruals. TNPL has already completed construction of the facility, positioning it to begin commercial operations and start contributing to tissue division revenue from the third quarter of FY27 onward.

Why Is TNPL Investing in Tissue Paper and Power Systems Now?

The second project, a Revamp of Steam and Power System (RSPS), carries a cost of Rs 250 crore, split between Rs 200 crore in debt and Rs 50 crore in internal accruals. The RSPS project is aimed at improving the efficiency and reliability of TNPL’s steam and power infrastructure, which underpins its core paper and paperboard manufacturing operations. Together, the two projects represent a diversification and efficiency push: tissue paper gives TNPL a foothold in a faster-growing paper segment driven by hygiene and away-from-home consumption, while the power system revamp targets the cost base of its existing paper production.

Funding the combined Rs 600 crore investment through a mix of Rs 470 crore in debt and Rs 130 crore of internal accruals suggests TNPL is balancing leverage with internally generated cash, a structure that keeps the company’s overall debt load manageable while still funding two sizeable capital projects concurrently.

What Does This Mean for India’s Paper Industry?

TNPL’s move into tissue paper mirrors a broader trend among large Indian paper manufacturers diversifying beyond commodity writing, printing and packaging grades into faster-growing, higher-margin categories such as tissue. With Satia Industries separately completing a maplitho and artboard capacity upgrade in the same week, September 2026 is shaping up as an active month for capital deployment across India’s paper sector, as manufacturers position for both efficiency gains and product-mix diversification ahead of the next demand cycle.

Market Reaction and Industry Response

TNPL has previously flagged plans to explore value-added products using paper and board as raw materials, including diversification into notebook manufacturing, alongside its tissue ambitions. The scale of the Rs 600 crore commitment, and the decision to fund it substantially through debt, signals confidence in demand for both the tissue segment and the efficiency gains expected from the power system revamp. Paper industry observers will be watching whether the commissioning timeline holds, given that large paper machine and infrastructure projects in India have frequently seen schedules extend, as seen with Satia Industries’ own PM3 upgrade.

What Happens Next?

Both the tissue plant and the RSPS project are targeted for commissioning by the third quarter of FY27, after which TNPL expects tissue division revenue contributions to begin. Investors will be tracking whether the 34,000 TPA tissue capacity ramps smoothly and whether the power system revamp delivers the efficiency improvements TNPL is targeting for its broader paper and paperboard operations. The company’s ability to service the Rs 470 crore debt component while ramping two new facilities simultaneously will also be a key metric to watch in coming quarters.

Frequently Asked Questions

How much is TNPL investing in its tissue plant and power system revamp?

TNPL is investing a combined Rs 600 crore, comprising Rs 350 crore for a 34,000 TPA tissue paper plant and Rs 250 crore for a Revamp of Steam and Power System (RSPS) project.

When will TNPL’s new tissue plant start commercial operations?

The tissue plant, which has already been constructed, along with the RSPS project, are both expected to be commissioned by the third quarter of FY27.

How is TNPL funding its Rs 600 crore capex plan?

The investment is funded through a mix of Rs 470 crore in debt and Rs 130 crore in internal accruals across both the tissue plant and power system projects.