Dhampur Sugar Mills issues ₹50 crore CP at 6.80% to Federal Bank
- Issued commercial paper worth ₹50 crore to Federal Bank Limited
- Instrument carries a fixed interest rate of 6.80%
- Tenure is 88 days with maturity on January 1, 2027
- Credit rating assigned is IND A1+
*this image is generated using AI for illustrative purposes only.
Dhampur Sugar Mills has issued commercial paper worth ₹50 crore to Federal Bank Limited, with an allotment date of October 5, 2026. The short-term debt instrument carries an interest rate of 6.80% and is scheduled for redemption on January 1, 2027.
The issuance comprises 1,000 units of commercial paper with a tenure of 88 days. The issue value was recorded at ₹49,19,35,000, while the redemption value stands at ₹50,00,00,000. The security has been assigned a credit rating of IND A1+ by the rating agency.
Instrument details
The company filed the intimation with both the National Stock Exchange and BSE Limited regarding the allotment. The commercial paper is classified as unlisted. Key financial and operational parameters of the issue are outlined below:
| Parameter | Details |
|---|---|
| Issuer | Dhampur Sugar Mills |
| Subscriber | Federal Bank Limited |
| Total Value | ₹50 crore |
| Interest Rate | 6.80% |
| Tenure | 88 days |
| Allotment Date | October 5, 2026 |
| Maturity Date | January 1, 2027 |
| Credit Rating | IND A1+ |
What the numbers show
The discount between the issue value of ₹49,19,35,000 and the redemption value of ₹50,00,00,000 reflects the implied yield embedded in the instrument. This spread represents the cost of borrowing for the 88-day period, aligning with the stated coupon rate of 6.80%. The choice of Federal Bank Limited as the sole subscriber indicates a concentrated funding source for this specific tranche.
Historical Stock Returns for Dhampur Sugar Mills
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +3.38% | +7.42% | +2.33% | +25.67% | +31.61% | -34.26% |
How might the 6.80% interest rate on this commercial paper influence Dhampur Sugar Mills' overall weighted average cost of capital in the upcoming quarter?
What impact could the concentration of funding from Federal Bank Limited have on Dhampur Sugar Mills' future debt diversification strategy?
Will the IND A1+ credit rating allow Dhampur Sugar Mills to access lower-cost short-term financing in subsequent issuances?
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