Dalmia Bharat Sugar & Industries has provided comprehensive guidance to shareholders regarding the apportionment of cost of acquisition following the completion of its demerger scheme with Dalmia Bharat Refractories Limited (DBRL). The company issued detailed instructions on December 18 for calculating post-demerger shareholding costs.

Demerger Scheme Details

The demerger scheme between the company and DBRL became effective on October 9, following approval from the National Company Law Tribunal, Chennai Bench on September 12. The scheme involves the transfer of Dalmia Magnesite Corporation and Govan Travels as demerged undertakings to DBRL.

Cost Apportionment Framework

The company has provided specific guidance on how shareholders should apportion their pre-demerger cost of acquisition between the two entities, in accordance with Income Tax Act provisions.

Practical Calculation Example

The company provided a detailed example to illustrate the cost apportionment mechanism for shareholders:

Regulatory Compliance

The cost apportionment follows Section 49(2C) and 49(2D) of the Income Tax Act, 1961, which govern the treatment of shares in demerger transactions. The allocation is based on the net book value of assets transferred relative to the company's net worth as of June 30, 2023.

Important Shareholder Notice

The company emphasized that this information should be preserved carefully as it will be relevant for calculating taxable capital gains on future share transfers. However, the company clarified that this communication serves as general guidance and should not substitute independent professional advice.

Shareholders eligible for the demerger benefits were determined based on the record date of October 31, with names appearing in the register of members or beneficial owners maintained by registrar and transfer agents.

Dalmia Bharat Sugar & Industries has received a significant boost to its short-term borrowing capabilities with ICRA Limited reaffirming its top-tier credit rating while doubling the commercial paper program amount. On December 12, 2025, ICRA reaffirmed the [ICRA]A1+ rating for the company's commercial paper program, enhancing the amount from ₹500.00 crore to ₹1000.00 crore.

Rating Enhancement Details

The rating action demonstrates ICRA's continued confidence in the company's financial strength:

ICRA's Rationale for Rating Reaffirmation

ICRA's rating reaffirmation takes into account several key strengths of Dalmia Bharat Sugar and Industries Limited. The rating agency highlighted the company's operationally-efficient sugar mill operations with healthy gross recovery rates reported over the years. This performance has been aided by high-yielding cane in the varietal mix and comprehensive cane developmental activities undertaken by the company.

Operational Strengths and Diversification

The company operates with a crushing capacity of 43,200.00 tonnes of cane per day (TCD) across Uttar Pradesh and Maharashtra, providing buffer against agro-climatic fluctuations. ICRA noted the scale-up in distillery operations over the past two years, coupled with cogeneration that provides alternative revenue streams and acts as a cushion against the cyclicality of the sugar business.

Financial Performance Metrics

The rating agency emphasized the company's strong financial profile with comfortable debt coverage metrics:

Capacity Expansion and Future Outlook

Dalmia Bharat Sugar is enhancing its distillery capacity to 950.00 KLPD from the current 850.00 KLPD, with completion expected in the current fiscal. The company also operates a co-generation capacity of 138.00 MW. ICRA expects sucrose diversion towards B-heavy molasses/juice-based ethanol and the resultant lower sugar inventory, along with the likely capacity expansion of the grain-based distillery, to keep leverage low.

Liquidity Position

ICRA assessed the company's liquidity position as strong, with cash and bank balance of around ₹662.98 crore and liquid investments of ₹328.45 crore as of September 30, 2025. The agency expects the company to comfortably meet its debt repayment obligations in the medium term with healthy cash flows from operations.

Regulatory Compliance

The disclosure was made in compliance with Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, demonstrating the company's commitment to transparency in financial dealings. This rating enhancement provides Dalmia Bharat Sugar with greater financial flexibility and access to competitive short-term funding options.