Shares of sugar mills rallied on Wednesday after CNBC-TV18 reported that the Cabinet may consider fresh ethanol blending proposal on Thursday, and may discuss up to Rs 15,000 crore soft loans to sugar mills along with a subsidy of Rs 3,355 crore on loans to sugar mills.
Shares of Balrampur Chini Mills rose over 5 percent to Rs 141.25 per share intraday on NSE. Dhampur Sugar Mills jumped 4.54 percent to Rs 246.55 per share. Mawana Sugara shares surged 9 percent to Rs 48.80 per share. Dalmia Bharat Sugar rose 5 percent to Rs 132.45 per share and Dwarikesh Sugar advanced 3 percent to Rs 32.30 share.
Sugar mills are receiving huge boost from the government. Recently on February 14, the government hiked the minimum selling price (MSP) by Rs 2 per kg to Rs 31. The move will boost the liquidity of cash-strapped millers and help clear mounting cane arrears of around Rs 20,000 crore.
Last year, on September 27, 2018, the cabinet approved a Rs 5,538 crore package to deal with the excess sugar production to boost exports and help clearing dues of cane growers. All these efforts by the government is to improve the liquidity to clear the dues.
Interestingly, the sugar stocks have already escalated more than 30 percent this year. Balrampur Chini Mills gained 30 percent, Dhampur Sugar Mills rose 52 percent, Dalmia Bharat Sugar jumped 38 percent and Dwarikesh Sugar added 41 percent.
First Published: Mar 6, 2019 1:44 PM IST
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