📌 At a glance:
Dhampur Sugar Mills is buying back 10.81 lakh shares at ₹185 apiece via tender offer. That’s a total outflow of nearly ₹20 crore, aimed at “rewarding shareholders” — or as we like to call it, corporate India’s way of saying, “Sorry for the low PE, have some sugar.”
🏢 About Dhampur Sugar Mills Ltd
| Detail | Info |
|---|---|
| Listed On | BSE (500119), NSE (DHAMPURSUG) |
| Sector | Sugar & Ethanol |
| Face Value | ₹10 |
| Promoter Holding | ~49% (as of latest filing) |
| Headquarters | Dhampur, Uttar Pradesh |
| Website | dhampursugar.com |
Dhampur is one of India’s oldest integrated sugar mills, producing everything from sugar and ethanol to power and chemicals. If ethanol is India’s green gold, Dhampur is sitting on a distillery throne. 👑
💸 Buyback Details
| Parameter | Details |
|---|---|
| Buyback Size | 10,81,081 shares |
| Buyback Price | ₹185 per share |
| Total Outlay | ₹20 crore approx |
| Type | Tender Offer (Proportionate Basis) |
| Record Date | TBA (pending) |
| Eligibility | All shareholders as on record date |
This move comes days after the Board’s approval on 16th May 2025, followed by the Public Announcement published on 20th May in Business Standard (English + Hindi).
📜 Full Public Announcement:
Click here to download PDF
🔎 What’s the Big Deal About a Buyback?
A buyback is often seen as:
- ✅ A vote of confidence by the company in its future
- ✅ A method to improve EPS (Earnings per Share) by reducing equity
- ✅ A way to deploy excess cash
- 🚩 Or… a cover-up when no better investment opportunities exist
In Dhampur’s case — it’s somewhere between “investor-friendly gesture” and “we don’t know what else to do with the cash”.
📈 Share Price vs Buyback Price
| Metric | Value |
|---|---|
| Current Market Price (CMP) | ₹169 (as of May 24, 2025) |
| Buyback Price | ₹185 |
| Premium Offered | ~9.5% |
So, if you tender your shares — you get a ~₹16 premium. Nice. But the real question is…
Will the stock even reach ₹185 on open market after this ends? 🤔
🔍 Company Financials (FY25 Preview)
| Metric | FY25 Est. (Standalone) | YoY Trend |
|---|---|---|
| Revenue | ₹4,150 Cr | ⬆️ +7% |
| Net Profit | ₹188 Cr | ⬇️ -12% |
| EPS | ₹24.3 | ⬇️ |
| Debt | ₹980 Cr (est.) | ⬇️ |
| Ethanol Contribution | ~32% of total revenue | ⬆️ |
🔹 Margin pressures due to falling sugar prices and higher input costs
🔹 Ethanol blending policy continues to boost segment profitability
🔹 Buyback could slightly improve EPS, but is unlikely to change fundamentals
🧠 EduInvesting Take
So let’s break it down:
- The buyback is tiny (~1.6% of total equity). Don’t expect fireworks.
- 9.5% arbitrage on tender — decent, but not exciting enough to camp overnight for.
- Stock has been under pressure, down ~15% in 6 months. This is an attempt to change that narrative.
- Sugar sector in India is going through a cyclical rollercoaster. If you’re in this stock for ethanol, the real show is in the next ethanol policy announcement, not the buyback.
⚠️ Risks & Red Flags
- Buyback could be optically positive, but won’t solve structural issues like falling sugar realization
- Tender offers are proportionate — so small retail holders may get only partial acceptance
- Volatility in sugar prices and political interference (UP government subsidy schemes etc.) could derail FY26 projections
🧮 Quick Math: What’s in It for You?
Let’s say you hold 100 shares at ₹169, and you tender all 100.
| Scenario | Value |
|---|---|
| Shares accepted (assume 30%) | 30 × ₹185 = ₹5,550 |
| Remaining (70 shares) | 70 × ₹169 = ₹11,830 |
| Total Value Post Buyback | ₹17,380 |
| Cost Pre-Buyback | ₹16,900 |
| 📈 Net Gain | ₹480 (2.8%) |
Not bad — but not Diwali either 🎆
📆 Next Steps & Timeline
- Record Date: To be announced
- Tendering Period: Typically 2–3 weeks after record date
- Payout Date: Within 7 working days post closure
Keep an eye on www.dhampursugar.com, SEBI, and Centrum.co.in for updates.
🗓️ Published: May 26, 2025
✍️ By: Prashant Marathe
Tags: Dhampur Sugar buyback 2025, sugar sector, ethanol blending, tender offer, investor returns, BSE, NSE, agro stocks, sugar mills India, share buyback
