Ethanol stock jumps after company acquired 100% stake in Sonitron Bio Organics
India’s ethanol blending push is boosting sugar stocks, with major players like Balrampur Chini and Dhampur Bio Organics benefiting. Dhampur’s acquisition of Sonitron Bio Organics signals strategic growth in bioenergy and agriculture, aligning with clean energy goals.
The bioenergy sector in India, particularly ethanol blending, has provided a significant boost to sugar stocks. Ethanol, derived from sugarcane, plays a crucial role in India’s push to achieve 20% ethanol blending by 2025, reducing reliance on fossil fuels. This has created a favorable environment for sugar companies that are also involved in ethanol production.
Major players in this space include Balrampur Chini Mills, EID Parry India, Shree Renuka Sugars, and Triveni Engineering & Industries. These companies are benefiting from higher ethanol demand, which offers an additional revenue stream, especially during surplus sugar production years. The government’s ethanol incentives and increased blending targets have further boosted investor confidence in sugar stocks, contributing to their strong performance in recent years.
Share Price
The shares of Dhampur Bio Organics Limited are trading at Rs. 130 up by 1.81% from its previous close of Rs. 127.44 as of November 28, 2024.
Recent Updates
On November 27, 2024, the Board of Directors approved the acquisition of 100% shareholding in Sonitron Bio Organics Private Limited, making it a wholly owned subsidiary. The acquisition involves the purchase of 10,000 equity shares, each valued at Rs. 10, totaling Rs. 1,00,000.
Established on November 8, 2023, Sonitron Bio Organics is engaged in the manufacturing and dealing of chemicals, and agricultural products, including sugar and allied sugar products. The company reported a turnover of Rs. 0.93 lakh as of March 31, 2024.
The acquisition aims to help the parent company expand its market reach by entering new customer segments, especially in the agricultural and allied sectors, including sugar. The strategic move is expected to provide significant growth opportunities in these markets.
About the Company
Incorporated in 2022, Dhampur Bio Organics Ltd. (DBOL) is an integrated sugarcane processing company with a diverse portfolio in agri-business and bioenergy. The company manufactures a wide range of products, including refined and raw sugar, chemicals, ethanol, and biomass-based renewable power.
DBOL is also involved in the co-generation of power, utilizing biomass to produce renewable energy. With a focus on sustainability, the company plays a significant role in biofuels and renewable energy production, contributing to India’s shift towards clean energy.
Through its diversified operations, DBOL aims to strengthen its position in the growing agri-business sector while capitalizing on the increasing demand for biofuels and sustainable power solutions.
Conclusion
Dhampur Bio Organics Limited’s recent acquisition of Sonitron Bio Organics demonstrates the company’s strategic expansion in the bioenergy and agricultural sectors. By purchasing a 100% stake in this new subsidiary, DBOL is positioning itself to capitalize on India’s growing ethanol blending market and broader renewable energy opportunities.
The move aligns with the government’s push towards sustainable energy solutions and offers potential for market diversification. With its integrated approach to sugarcane processing, ethanol production, and renewable power generation, Dhampur Bio Organics is well-placed to contribute to India’s clean energy transition while potentially enhancing its own growth and market value.
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Source Link : Trade Brains
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