Mumbai: Sugar stocks were in limelight Wednesday, surging up to 13 percent, after the government approved Rs 6,000 crore interest-free loan to sugar mills to help them partly clear cane price arrears to farmers.
Shares of Sakthi Sugars surged 12.66 percent, Bajaj Hindusthan Sugar soared 10.05 percent, Oudh Sugar Mills (9.15 percent) and Shree Renuka Sugars (7.61 percent) on the BSE.
Among others, EID Parry India gained 5.88 percent, Dhampur Sugar Mills gained 4.50 percent, Balrampur Chini Mills rose by 2.69 percent and Dwarikesh Sugar were up 2.26 percent.
"In a major news that boosted investor sentiments today, government approved Rs 6,000 crore worth interest-free loan to sugar companies in order to help the ailing companies in the sector to clear cane's dues to farmers," said Hiren Dhakan, Associate Fund manager at Bonanza Portfolio.
The government today approved Rs 6,000 crore interest-free loan to sugar mills to help them partly clear cane price arrears to farmers that have touched about Rs 21,000 crore.
The decision, which will cost the exchequer about Rs 600 crore, was taken in a meeting of the Cabinet Committee on Economic Affairs (CCEA) today.
"Mills have been unable to make payment to farmers because of high production and lower domestic prices. Cane arrears have reached Rs 21,000 crore," Union Minister Nitin Gadkari said after the meeting.
Meanwhile, the benchmark BSE Sensex ended at 26,840.50, up 359.25 points.
