Dhampur Sugar Mills Limited , a prominent player in the sugar industry, is currently grappling with a significant financial challenge while also making strategic moves in the debt market.

Government Reinstates Import/Export Fee

The Assistant Excise Commissioner of the Uttar Pradesh government has reinstated an import/export fee of ₹1 per bulk litre on denatured and special denatured spirit. This decision follows a Supreme Court order dated October 23, 2024, which upheld the state's authority to levy such fees on denatured alcohol.

The fee covers an extended period from the financial year 2018-19 to 2024-25, resulting in a substantial financial impact for Dhampur Sugar Mills. The company's Dhampur unit is facing a total demand of ₹37.73 crore.

Company's Response

Dhampur Sugar Mills is not taking this development lightly. The company has stated that it is contesting the decision and is currently evaluating its legal options. It plans to pursue the matter through appropriate forums, indicating a potential legal battle ahead.

Commercial Paper Issuance

In a separate development, Dhampur Sugar Mills has successfully issued Commercial Paper (CP) amounting to ₹100 crore. The details of this financial instrument are as follows:

The Commercial Paper will be listed on the BSE Limited, providing liquidity to the instrument.

Implications and Outlook

The reinstatement of the import/export fee presents a significant financial challenge for Dhampur Sugar Mills, potentially impacting its liquidity and profitability. However, the company's ability to raise funds through Commercial Paper at a competitive interest rate of 6.95% demonstrates its strong credit standing in the market.

As Dhampur Sugar Mills navigates these financial developments, stakeholders will be keenly watching how the company manages the potential ₹37.73 crore liability while maintaining its operational efficiency and financial health.

Dhampur Sugar Mills Limited (DSML) has announced the issuance of commercial paper (CP) worth ₹100 crore, marking a significant financial move for the company. The sugar manufacturer has provided detailed information about this debt instrument through a filing with the stock exchanges.

Key Details of the Commercial Paper

Significance of the Move

The issuance of commercial paper is a common strategy used by companies to meet short-term financial obligations or to manage working capital. For Dhampur Sugar Mills, this ₹100 crore CP issuance could provide the company with immediate liquidity to fund its operations or upcoming projects.

Listing and Regulatory Compliance

DSML has confirmed that the commercial paper will be listed on the BSE Limited. This listing ensures transparency and provides an opportunity for investors to trade these debt instruments in the secondary market.

The company has duly informed the National Stock Exchange of India Ltd. and BSE Limited about this issuance, in compliance with regulatory requirements. Aparna Goel, Company Secretary of Dhampur Sugar Mills Limited, signed the intimation to the stock exchanges.

Investor Considerations

The high credit rating of IND A1+ assigned by India Ratings and Research Private Limited indicates a strong degree of safety regarding timely payment of financial obligations. This rating may provide confidence to investors about the company's ability to honor its commitments on the commercial paper.

While this development showcases Dhampur Sugar Mills' ability to raise short-term funds at competitive rates, investors and market analysts will likely monitor how the company utilizes these funds and its impact on the overall financial position of the sugar manufacturer.

As always, investors are advised to conduct their own research and consider their financial goals before making any investment decisions based on this information.