Balrampur Chini Mills Share price and Fundamental Analysis

Company History

Led by Mr. Vivek Saraogi, Balrampur Chini Mills Limited (BCML) was incorporated in the year 14th July 1975. It is one of the major integrated sugar sugar mills in India. The Company is a comprehensive and integrated sugar producer with substantial interests in sugar, ethanol and power co-generation. The Company operates ten manufacturing facilities across the East and Central Uttar Pradesh. The Company has distilleries in five locations, Balrampur, Babhnan, Mankapur, Gularia and Maizapur with an aggregated production capacity of 1050 KLPD. Apart from this, the Company mainly manufacture and sell sugar. Besides this, the allied business activities undertaken by the Company primarily consists of manufacturing and marketing of Ethyl Alcohol & Ethanol, generation and sale of power and manufacturing and sale of agricultural fertilizers.

Balrampur Agro Industries (P) Limited and Vivek Agro Industries (P) Limited became subsidiaries of the Company in the year 1980. Vivek Ganna Pvt Ltd., Ganna Agro Pvt. Ltd., Maharajaganj Agro Industries Pvt. Ltd., and Stuti Agro Pvt. Ltd., became subsidiaries of the Company during the year 1986. In the year 1990, the company acquired the Babhnan Sugar Mills Limited with a capacity of 1,000 TCD. Later on, the Babhnan Sugar Mills Ltd was merged with BCML with effect from 1 April 1994. During the year 1995, BCML ventured into the distillery business, commissioning and expanding distilleries in four locations (Balrampur, Babhnan, Mankapur and Gularia) with an aggregate capacity of 560 KLPD. The Company had diversified into distillery operations at the Balrampur unit through the commissioning of a 60-klpd distillery. In April 1998, BCML acquired a controlling stake in Tulsipur Sugar Co. Ltd. (TSC), a profit-making sugar company located near Balrampur in Eastern Uttar Pradesh with an installed capacity of 2,500 TCD. TSC was merged with BCML with effect from 1st April of the year 1999. The crushing capacity of Tulsipur Sugar was subsequently expanded to 7000 TCD. In March 2003, BCML commissioned a bagasse based co-generation power plant with a capacity of 19.55 MW at Balrampur and the said capacity has been increased to 24.55 MW. In the same year BCML had set up an integrated Greenfield sugar complex at Haidergarh in East Uttar Pradesh with a sugarcane crushing capacity of 4,000 TCD and co-generation capacity of 20.25 MW. Again, the company had set up another one-distillery operations at the Babhnan unit in the year 2004, with a capacity of 60 klpd.

The Company discontinued the country liquor business with effect from March of the year 2005. A Greenfield sugar project having a capacity of 7000 TCD was set up which was commissioned in November of the year 2005 at Akbarpur, Dist Ambedkar Nagar, U.P. A bagasse based co-generation power plant with a capacity of 18 MW was also installed at Akbarpur. The crushing capacity was subsequently expanded to 7,500 TCD. BCML acquired an integrated sugar unit having a sugar plant of 7500 TCD and co-generation power plant of 12MW situated at Rauzagaon, District Barabanki, U.P. from Dhampur Sugar Mills Ltd. in March 2006 in an all cash deal of Rs. 182 crores. Another one new Greenfield integrated sugar complex has been set up at Mankapur, Dist. Gonda, Eastern U.P. with a capacity of 8000 TCD sugar plant, 34 MW co-generation power plant, 100 KLPD distillery and 20 MT bio-compost manufacturing facility. The plant has begun operations in November of the year 2006. As in the identical year BCML had taken over the management of Indo Gulf Industries Ltd. BCML has acquired a 47.63% stake in the equity capital of Indo Gulf Industries Ltd. (IGIL). BCML has taken over the management of IGIL.

A new Greenfield integrated sugar complex has been set up at Kumbhi, Dist. Lakhinpur, Kheri, UP. with the capacity of 8,000 TCD sugar plant and 20 MW co-generation power plant. The plant began operations in April of the year 2007. IGIL became as the subsidiary of the company with effect from 30th August 2007. Balrampur Overseas Pvt. Ltd. [BOPL] was incorporated in Hong Kong with the purpose of trading activities. The entire holding of BOPL is held by Balrampur Chini Mills Ltd., which became the subsidiary of the Company with effect from 11th October 2007.

As of March 2008, the rating agency ICRA assigned an LA+ rating to the Rs 8.41 billion long-term debt program and Rs 6.2 billion fund based bank limits of Balrampur Chini Mills (BCML), indicating high credit quality rating. ICRA also assigned an A1 rating to the Rs 685 million non-fund based limits of the company. The rating indicates highest credit quality in the short-term. Within this category, certain instruments are assigned the rating of A1+ to reflect their relatively stronger credit quality.

Khalilabad Sugar Mills Pvt. Ltd (KSMPL) was merged with the Company pursuant to order dated 14th August 2013 of the Hon'ble Board for Industrial and Financial Reconstruction (BIFR) sanctioning the Modified Draft Rehabilitation Scheme for the merger of KSMPL with Balrampur Chini Mills Ltd. The said Scheme came into operation from the appointed date i.e. 1st April 2012. The Company issued and allotted 526894 equity shares of Re 1/- each to the shareholders of KSMPL in the ratio of 1:20 pursuant to the said scheme.

During the year 2017, Visual Percept Solar Projects Private Limited (VPSPPL) became an associate company; consequent to the acquisition of 45% equity stake of VPSPPL by the Company, pursuant to the Call Option Agreement dated 30th March 2015.

During the year 2017, the Company sought approval of the shareholders to buy-back its equity shares, through the 'Tender Offer' route using the Stock Exchange Mechanism, for an aggregate amount of up to Rs 17,500 lacs (being 14.72% of the total paid-up equity share capital and free reserves of the Company as on 31st March, 2016), at a price of Rs 175/- per equity share on a proportionate basis in accordance with the provisions contained in the Act, rules made there under, the SEBI (Buy Back of Securities) Regulations, 1998 and other applicable circulars, clarifications and notifications

Following the completion of the Open Offer formalities under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (as amended) by the Ganesh Explosives Private Limited (Acquirer), Indo Gulf Industries Limited (IGIL) ceased to be the subsidiary of the company with effect from 19 May 2017. Accordingly, the entire shareholding of the Company in IGIL along with the control and management of IGIL was transferred to the Acquirer. The Company has also been reclassified as 'public shareholders' in terms of Regulation 31A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended) (the 'Listing Regulations'), by the concerned stock exchange where the equity shares of IGIL are listed.

During the year 2018, Auxilo Finserve Pvt., Ltd., (AFPL) became an associate company, consequent to allotment of 3,75,00,000 equity shares having a face value of Rs 10/- each (50% equity shareholding) to the Company by AFPL.

During the year 2018-19, the Board of Directors of the Company at their meeting held on 5th April, 2019 approved buy-back of 84,38,327 Equity Shares of the Company, through Tender Offer route using the Stock Exchange Mechanism, for an aggregate amount of upto Rs14767.07 Lacs, at a price of Rs 175/- per Equity Share on a proportionate basis in accordance with the provisions contained in the Act, rules made thereunder, the SEBI (Buy-Back of Securities) Regulations, 2018 and other applicable circulars, clarifications and notifications.

During the year 2019-20, the settlement of buy-back of 84,38,327 equity shares of the Company, for an aggregate amount of upto Rs 14767.07 lakhs at a price of Rs 175/- per Equity Share on a proportionate basis have been completed on 4 June, 2019 and relevant shares have been extinguished on 10 June, 2019. Consequent to this, the equity share capital has been reduced by Rs 84.38 Lakhs and Capital Redemption Reserve of an equivalent amount has therefore been created.

Post the Buyback of 84,38,327 equity shares, the equity share capital of the Company stood at Rs 2200 Lacs consisting of 22,00,00,000 equity shares of Re 1 each as on 31 March, 2020.

The Company's Gularia distillery commenced operations in January 2020 with a production capacity of 160 KLPD ethanol through the B-Heavy and C-Heavy molasses routes.

During the year under review, the Board of Directors of the Company at its meeting held on 9th August, 2021, approved the buyback of equity shares, from the open market route through the stock exchanges, amounting to Rs. 215.25 crores. The buyback of equity shares through the stock exchange commenced on 17th August, 2021 and was completed on 21st October, 2021.

During the year 2022, Company expanded the distillery capacity at Gularia to 200 KLPD. In addition, it was able to run distilleries at optimum capacity owing to zero liquid discharge status at all its distilleries.

During the year 2022, the Company had signed a Share Purchase Agreement (SPA), dated 10th February, 2022 with Torrent Power Limited, Blue Daimond Properties Private Limited (BDPPL/other shareholder holding balance 55% Equity Shares in VPSPPL) and Visual Percept Solar Projects Private Limited (VPSPPL/Associate Company) to transfer the entire stake held by the Company (holding 45% Equity Shares in VPSPPL) to Torrent Power Limited. Subsequently, 7852500 Equity Shares of Rs. 10/- each held by the Company were transferred to Torrent Power Limited on 15th February, 2022. Upon completion of the transfer formalities, VPSPPL ceased to be an Associate Company of the Company with effect from 15th February, 2022.

During year 2022-23, the Balrampur distillery was expanded from 160 KLPD to 330 KLPD with a state-of-the art condensate polishing unit. The Maizapur Distillery Plant of 320 KLPD was commissioned effective 6th November 2022.