The Hindu Business Line : Balrampur Chini announces 12:100 rights at a premium

RIDING on a 50 per cent growth in turnover and a 255 per cent growth in net profit, sugar major Balrampur Chini announced a rights issue in the ratio of 12 shares for every 100 held.

The company has decided to charge a premium of Rs 250 for every equity share of Rs 10. In the process, Balrampur Chini is aiming to mop up Rs 59.19 crore by issuing 22.76 lakh shares.

In third quarter of 2003-04, gross turnover increased to Rs 242.42 crore from Rs 161 crore and net profit jumped to Rs 10.28 crore from Rs 2.90 crore. Similarly, gross profit after interest but before depreciation and tax increased to Rs 20.75 crore from Rs 8.77 crore. The EPS shot up to Rs 5.42 from Rs 1.53.

The company spokesman said there are two major factors behind the healthy growth of its results. First, Balrampur Chini was successful in crushing more cane and hence there was more sugar for sale. "The corresponding quarter of the previous fiscal was too bad. So we this quarter we are showing such high growth", he said.

The second is that the power plant of the sugar company has started generating revenue. In the last quarter, its co-generation power business has recorded a turnover of Rs 11.76 crore and a profit before tax of Rs 3.43 crore.

Similarly, earnings from the alcohol business increased to Rs 33.40 crore from Rs 27.44 crore but net profit before tax and interest dropped to Rs 3.09 crore from Rs 3.65 crore.

In December last year, the promoters of Balrampur Chini Mills Ltd, the city-based Saragois, offloaded 10 per cent of their stake in the company in favour of institutional investors such as DSP Merill Lynch, Reliance Mutual Fund, HSBC and India Capital Fund.

They sold 19 lakh shares for a consideration of Rs 50 crore. With that move, the Saraogis' stake dropped to 37 per cent. According to a company spokesperson, post-rights issue the promoters' stake will remain at same level.

The rights issue is expected to hit the market some time in the middle of May, this year and it will be managed by merchant bankers such as Enam Securities Ltd and Lodha Capital Markets Ltd.

More Stories on : Performance | Sugar | Rights Issue

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Balrampur Chini announces 12:100 rights at a premium