Sugar stocks were mixed in trade on Thursday after the Cabinet approved allocation of additional funds to sugar mills.
KM Sugar Mills, Sakthi Sugars, EID Parry, Rana Sugars, Andhra Sugar and Shree Renuka Sugars rallied 2-5 percent whereas Triveni Engineering, Dwarikesh Sugar, Dhampur Sugar, Uttam Sugar, Rajshree Sugars and Balrampur Chini fell 2-6 percent which could be on profit booking.
While addressing press conference after the Cabinet Committee on Economic Affairs (CCEA) meeting, Finance Minister Arun Jaitley said the Cabinet has given its approval for funds amounting to Rs 2,790 crore towards interest subvention for extending indicative loan amount of Rs 12,900 crore.
The loan amount was given by banks to the sugar mills under ‘Scheme for extending financial assistance to sugar mills for enhancement and augmentation of ethanol production capacity’ for 268 applications/proposals, he added.
The amount of Rs 2,790 crore is in addition to Rs 1,332 crore already approved by CCEA in June 2018.
Jaitley said CCEA also approved Rs 565 crore towards interest subvention for extending indicative loan amount of Rs 2,600 crore by banks to the molasses based standalone distilleries.
The approval of interest subvention will help in improving liquidity of sugar mills by way of value addition to their revenues from supply of ethanol under Ethanol Blended Petro Programme (EBP), and reducing sugar inventories and thereby facilitate timely clearance of cane price dues of farmers and achieving 10 percent blending target of EBP.