The board of Balrampur Chini Mills on Saturday (10 April 2021) approved the revised capex of Rs 425 crore for the 320 kilo litres per day (KLPD) distillery plant.
On 4 November 2020, the company's board had approved a capex of Rs 320 crore for the aforementioned capacity addition project.
The company said that the increase in capex to the tune of Rs 105 crore is mainly owing to the inclusion of 20 KLPD of extra-neutral alcohol (ENA), higher storage capacity for raw material and finished goods, sharp rise in steel prices and change in designs of equipment to bring in more efficiency and embrace automation.
"The higher investment would result in higher efficiency, better recovery of ethanol from juice which will add to the bottom line and will result in better payback than envisaged earlier, it added.
The company proposes to borrow Rs 220 crore from banks under the scheme for extending financial assistance for enhancement of ethanol capacity as announced by the Government of India. Balance amount would be funded through internal accruals.
The company has already received in-principle approval from the Department of Food and Public Distribution, Government of India, confirming the eligibility for interest subvention on said loan of Rs 220 crore.
The plant which is expected to be commissioned by December 2022 would operate on dual fuel i.e. on sugarcane juice during the season and on grains during off season. The plant will be a complete zero liquid discharge plant (ZLD) equipped with incinerator boiler and turbine for cogeneration of power. The plant is expected to generate annual revenue of around Rs 650 crore and has a cash pay-back period of less than 4 years.
Separately, on Saturday (10 April 2021), the sugar maker informed that the credit ratings agency ICRA has reaffirmed the long and short-term credit ratings of Balrampur Chini Mills as [ICRA] AA and [ICRA] A1+, respectively. The ratings agency has revised the outlook on the long-term rating to 'positive' from 'stable'.
Balrampur Chini Mills is one of the largest sugar producers in India. The operations of the company are forward integrated, manufacturing alcohol (using molasses, a byproduct of sugar) and power (using cogeneration from bagasse, another byproduct of sugar manufacturing).
The company's consolidated net profit declined 62.91% to Rs 26.89 crore on a 10.34% fall in net sales to Rs 1072.17 crore in Q3 FY21 over Q3 FY20.
The scrip was down 3.10% to currently trade at Rs 226.75 on the BSE. It traded in the range of 222 and 242.45 so far during the day.
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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)
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