Sugar stocks in demand

Twelve sugar stocks rose 0.44% to 5% at 14:52 IST on BSE after the Cabinet Committee on Economic Affairs approved the guidelines for financial assistance to the sugar industry for payment of cane price arrears.

Dwarikesh Sugar Industries was locked at 5% upper circuit at Rs 24.80, Empee Sugars and Chemicals was also locked at 5% upper circuit at Rs 5.17. Triveni Engineering & Industries (up 3.05% at Rs 14.20), Bajaj Hindusthan (up 2.83% at Rs 14.55), Dhampur Sugar Mills (up 2.45% at Rs 35.50), Rana Sugars (up 2.36% at Rs 2.60), Oudh Sugar Mills (up 2.21% at Rs 18.50), Shree Renuka Sugars (up 1.76% at Rs 20.25), Sakthi Sugars (up 1.6% at Rs 15.85), KCP Sugar & Industries Corporation (up 1.2% at Rs 16.80), EID Parry (India) (up 1.07% at Rs 141.80) and Balrampur Chini Mills (up 0.44% at Rs 46.10) edged higher.

Meanwhile, the S&P BSE Sensex was up 30.45 points or 0.14% at 21,063.16.

As per the financial assistance package approved for the sugar industry, the Central Government will provide an interest subvention upto 12% at a simple rate of interest for the additional working capital loans to the sugar undertakings, equivalent to last three sugar seasons' excise duty, cess and surcharge on sugar (including notional equivalence for exports or availed Cenvat), to be provided by the banks. The sugar undertakings with loans classified as non performing assets (NPA) by the banks will also be eligible for the loans, provided the concerned state governments give guarantee for their new loans. The interest subvention would be for total loan duration of 5 years, including 2 years moratorium period. No interest subvention will be provided for the period of default in the principal repayments. The loans would be meant exclusively for effecting cane price payments by the sugar mills.

The expenditure for the scheme will be met fully from the Sugar Development Fund (SDF), a government statement said.

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