Sugar stocks rally on talks of interest-free loans worth Rs 7,000 cr for millers

MUMBAI: Shares of sugar companies gained momentum in rangebound market after the empowered group of ministers (EGoM) panel recommended 10 per cent ethanol blending in pertroleum products among other things.

The oil marketing companies and sugar mills will decide on ethanol blending by next week.

Agriculture Minister, Sharad Pawar, after the EGoM meeting, said the panel will recommend to the PM to allow sops to the sector.

Sugar mills may get Rs 7,000 crore interest free loans. The current debt of sugar mills may be recast as per the RBI norms.

Banks will also give loans to sugar mills against excise paid. These companies can use the loan against excise only for cane payment.

According to the Narendra Murukumbi, MD, Shree Renuka Sugars, the measures discussed by the panel is a good move. In an interview to ET Now, Murukumbi said that rise in ethanol blending prices will benefit the companies. He expects the ethanol blending prices will be based on the market price.

He added that the commitment from states towards industry is a positive and will help the industry over the long term.

Murukumbi is of the view saving in interest cost for mills will help with capital support.

Bajaj Hindusthan closed up 5.38 per cent, Dhampur Sugar was 5 per cent up, Mawana Sugar rose 4.98 per cent, Sakthi Sugares moved up 10.71 per cent and Dwarikesh Sugar moved up 5 per cent.