Davangere Sugar Company Limited (DSCL) has unveiled plans for a significant rights issue, aiming to raise up to INR 149.22 crore from its existing shareholders. This strategic move, approved by the company's Board of Directors on July 25, 2025, marks a pivotal moment for the sugar manufacturer as it seeks to strengthen its financial position.

Rights Issue Details

The rights issue, which allows existing shareholders to purchase additional shares at a potentially discounted price, has been meticulously planned through a series of corporate actions:

• Approval Process: Following the initial board approval, the Rights Issue Committee held meetings on July 31 and August 4, 2025, to finalize the details.
• Record Date: August 6, 2025, has been set as the record date to determine eligible shareholders for the rights issue.
• Public Announcement: In compliance with SEBI regulations, DSCL published advertisements on August 11, 2025, in two national daily newspapers:
  1. Financial Express (English)
  2. Jansatta (Hindi)

Regulatory Compliance

The company has emphasized its commitment to regulatory compliance, stating that the rights issue will be conducted in accordance with the Securities and Exchange Board of India (SEBI) Issue of Capital and Disclosure Requirements (ICDR) Regulations, as well as other applicable laws and circulars issued by SEBI.

Transparency Measures

In a move towards transparency, Davangere Sugar Company has made the following efforts:

• Website Update: The rights issue information has been uploaded on the company's official website ( http://www.davangeresugar.com ).
• Stock Exchange Notifications: Both the BSE Limited and the National Stock Exchange of India Limited have been informed about the rights issue and the subsequent newspaper publications.

Company Background

Davangere Sugar Company Limited, with its registered office in Davangere, Karnataka, is a key player in the Indian sugar industry. The company's proactive approach to capital raising through this rights issue suggests a focus on growth and operational enhancement.

While the specific use of funds raised through this rights issue has not been disclosed, such capital infusions are typically aimed at debt reduction, capacity expansion, or working capital requirements in the sugar industry.

Shareholders and potential investors are advised to keep an eye on further announcements from the company regarding the pricing and ratio of the rights issue, which are crucial details yet to be revealed.

Davangere Sugar Company Limited has announced a rights issue to raise up to ₹149.22 crore by offering 48.92 crore equity shares at ₹3.05 per share. The issue price represents a 12.86% discount to the market price of ₹3.50 as of July 24, 2025.

Key Details of the Rights Issue

Use of Proceeds

The company plans to utilize the funds raised for:

1. Repayment of bank loans: ₹67.50 crore
2. Adjustment of unsecured loans from promoter Ganesh Shivashankarappa Shamanur: ₹44.25 crore
3. General corporate purposes: ₹35.22 crore

Promoter Participation

Ganesh Shivashankarappa Shamanur, a promoter of the company, has undertaken to subscribe to his entire rights entitlement. He will also subscribe to any shares renounced in his favor by other promoters. His subscription will be adjusted against the outstanding unsecured loan of ₹88.12 crore provided to the company.

Company Background

Davangere Sugar Company Limited is engaged in the manufacture of sugar, molasses, power generation, and ethanol production. The company commenced sugar production in 1974 and has since expanded its operations to include a co-generation plant and a distillery unit.

The rights issue is expected to strengthen the company's balance sheet by reducing debt and providing additional working capital for its operations.

Investors should carefully review the Letter of Offer and consider the risks associated with the investment before participating in the rights issue.