Dhampur Sugar gains 8% amid maiden buyback plan

Stock market today, share market news: Shares of Dhampur Sugar Mills rallied by as much as 7.75 per cent in the early trade on Monday, January 1, to the day’s high of Rs 273.05 apiece on the BSE. The stock drew buyers' interest after the company, in its regulatory filing, said that the board will consider share buyback in its meeting on January 3.

This will be the company’s maiden share buyback. Companies buy back shares for several reasons, such as to increase the value of the remaining shares available by reducing the supply or to prevent other shareholders from taking a controlling stake.

“The notice is hereby given that the meeting of the Board of Directors of the Company has been scheduled on Wednesday, 3rd day of January 2024, inter alia, to consider a proposal for buyback of fully paid-up equity shares of the Company of face value of Rs. 10/- each as well as matters related or incidental thereto, in accordance with the applicable provisions under the Companies Act, 2013 (including the rules and regulations framed thereunder), the Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018, as amended, and other applicable laws,” said the company’s filing with the exchanges.

Lately, sugar stocks have been in focus after the centre reversed its earlier ban on the use of sugarcane juice for making ethanol.

Dhampur Sugar has been assigned a 'strong buy’ rating by one of the analysts, Trendlyne data shows.

In the past 12 months, the stock has underperformed the headline indices with a return of just 7 per cent.

Dhampur Sugar Mills Limited is an integrated sugarcane processing company. The company is engaged in the manufacturing and selling of sugar, power, and chemicals, while its three segments are sugar, distillery, and co-generation.