Dalmia Bharat Sugar & Industries Ltd (DBSIL) has plans to acquire a sugar manufacturing plant near Kolhapur (Maharashtra). The plant has a cane crushing capacity of 2,500 tonnes crushed per day (TCD), DBSIL disclosed on Wednesday, without naming the target company or the deal value.
Currently, DBSIL operates three integrated plants in Uttar Pradesh, with cane crushing capacity of 22,500 TCD and sugar production capacity of 3 lakh MT per annum. It is also a key supplier of sugar across northern India. The proposed addition of another sugar plant located in Maharashtra (another major cane-producing state) will enable the public-listed firm to operate in the western region as well.
Sugar is a highly regulated and regional commodity business from the supply side, which tracks global prices of the end product. Brazil and India are among the top sugar producers of the world.
DBSIL scrip shot up 8.19 per cent to close at Rs 21.54 a share on the BSE in a flat Mumbai market on Wednesday.
Last year, the diversified firm went through a restructuring where Dalmia Bharat Enterprises Ltd (which has under its fold the cement business) was demerged from Dalmia Bharat Sugar & Industries, which became a pure play sugar firm.
In FY12, Dalmia Bharat Sugar reported revenues of Rs 738.8 crore, with net profit of Rs 90 lakh. While the company reported losses in the first three quarters of FY12, it turned a profit in Q4 FY12, amounting to Rs 28.33 crore.
Only recently, emerging markets private equity major Actis has sold 5.5 per cent stake in the firm through its two entities called Boron India and Boron South Asia, for Rs 8.27 crore in a bulk deal.
However, Actis remains a shareholder in the demerged company Dalmia Bharat Enterprises. The cement business (housed under Avnija Properties, a subsidiary of Dalmia Bharat Enterprises) is backed by buyout giant KKR which said last year that it was investing Rs 750 crore for an undisclosed stake.
(Edited by Sanghamitra Mandal)