EID Parry India Limited has informed the Exchange about Agreement with Wholly Owned Subsidiary
EIDPARRY · price
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EID Parry India is shutting down the sugar refinery of its wholly owned subsidiary Parry Sugars Refinery India Private Limited (PSRIPL) at Kakinada, effective close of business on March 31, 2026. PSRIPL has accumulated losses of around Rs. 1,406 crores and a negative net worth of Rs. 672 crores; its business model built on imported raw sugar refining for export became unviable due to non-availability of natural gas, falling global white sugar premiums, accidents, regulatory shutdowns, and high finance costs. PSRIPL contributed about 13.48% of EID Parry's consolidated revenue (Rs. 4,262 crores) in FY 2024-25. To settle liabilities of Rs. 998 crores (including Rs. 877 crores in bank borrowings), the board approved an equity infusion of up to Rs. 610 crores and an inter-corporate loan of up to Rs. 130 crores into PSRIPL, expected to be completed by May 31, 2026. The parent will need to take a provision of approximately Rs. 655 crores spread across FY 2025-26 and FY 2026-27, plus impair Rs. 46 crores of investment value. The company has stated it has adequate funds to meet these obligations.
Shareholders should brace for a sizeable one-time charge of around Rs. 655 crores over the next two financial years, which will materially impact reported earnings. While the closure ends losses from a chronically unviable unit, the combined Rs. 740 crore cash outflow (equity plus loan) is significant and may weigh on the stock in the near term, though management has confirmed sufficient liquidity.