Dwarikesh Sugar edges higher after board OKs share buyback proposal

Dwarikesh Sugar Industries added 3.15% to Rs 83.40 after its board approved a proposal to buyback up to 30,00,000 fully paid-up equity shares of the company, representing 1.59% of total equity capital, at a price of Rs 105 per share.

The share buyback price represents a premium of 30% as compared with the scrips previous closing price of Rs 80.85 per share.

The aggregate consideration of this proposed buyback is up to Rs 31.50 crore. This aggregate consideration represents 4.49% of the aggregate of the fully paid-up equity share capital and free reserves as per the latest audited financial statements of the company as on 31 March 2023.

The buyback will be conducted on a proportionate basis through a tender offer mechanism. The companys shareholders holding shares as of the record date, i.e., 20 March 2024, are eligible to participate. They will have the opportunity to tender a portion of their shares at the buyback offer price.

The board of directors approved this buyback offer as it is aligned with its commitment to enhance shareholder value and optimize its capital structure. The buyback will help the company to distribute surplus funds to its shareholders holding equity shares broadly in proportion to their shareholding, thereby, enhancing the overall shareholder value," Dwarikesh Sugar said in a statement.

Dwarikesh Sugar Industries operates as an integrated sugar player with a current cane-crushing capacity of 21,500 tonnes crushed per day (TCD), distillery capacity of 337.5 kilo litres per day (KLPD) and co-generation capacity of 96 megawatt (MW). The operations of the company are spread across three sugar plants, i.e. Dwarikesh Nagar (DN), Dwarikesh Puram (DP) and Dwarikesh Dham (DD).

The company's net profit declined 6.75% to Rs 9.81 crore on a 18.48% fall in sales to Rs 312.91 crore in Q3 FY24 over Q3 FY23.

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