Balrampur Chini to Raise Rs 450 Crore Equity Fund for Lactose Derivatives Plant Expansion

Balrampur Chini Mills Ltd to Invest Rs 160 Crore in Lactogypsum Processing Plant

Balrampur Chini Mills Ltd, one of the largest integrated sugar companies in India, has announced plans to invest Rs 160 crore in setting up a lactogypsum processing plant in Uttar Pradesh. The company has also decided to raise up to Rs 450 crore through the issue of preferential shares to promoters as well as investors.

The proposed lactogypsum processing plant, which will be established at Kumbhi in Uttar Pradesh, is expected to have an installed capacity of about 76 lakh gypsum boards per annum. The plant will process lactogypsum generated as a byproduct from the company's poly lactic acid (PLA) manufacturing operations.

In a regulatory filing, the company stated that the board has approved the establishment of the lactogypsum processing plant at an estimated project cost of up to Rs 160 crore. The board also approved the utilisation of a portion of net proceeds from the preferential issue, amounting to up to Rs 160 crore, towards funding of the project.

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The board also approved the upward revision of the estimated capital outlay of the PLA project from Rs 2,850 crore to Rs 3,080 crore. This revision is necessitated due to cost escalations of about Rs 230 crore, primarily on account of increase in prices of key construction materials, global supply chain disruptions, and to incorporate further changes in engineering/designing during modelling review.

The revised enhanced capex, including cost escalations, will be funded through issue of equity shares on a preferential basis, debt, and internal accruals, the company said. Furthermore, the board approved issuance and allotment of up to 93,16,771 equity shares for cash for Rs 483 apiece for an amount aggregating up to Rs 450 crore to promoters, members of the promoter group, and investors on a preferential basis.

In addition, the board gave the nod to raise up to Rs 200 crore through the issuance of non-convertible debentures (NCDs) on a private placement basis. Balrampur Chini Mills Ltd has ten sugar factories in UP with an aggregate sugarcane crushing capacity of 80,000 tonnes per day. The company also has distillery and co-generation operations of 1,050 kilo litre per day and 175.7 MW, respectively.

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As part of its diversification efforts, Balrampur Chini has ventured into the bio-plastic business and is setting up a PLA manufacturing plant at Kumbhi in UP with a total annual capacity of 80,000 tonnes.