Sugar stocks rise on Rangarajan's panel report on decontrol
Mumbai: Shares of sugar companies on Friday soared as much as 5 percent after the the Rangarajan Committee suggested de-control of the industry by giving freedom to mills to sell their produce in open market.
Cheering the move, shares of Simbhaoli Sugars surged 4.8 percent, while Balrampur Chini Mills rose by 2.04 percent, Dhampur Sugar Mills up 3.25 percent, DCM Shriram Industries (0.89 percent) and Rana Sugars (1.5 percent).
"This is a step in the right direction which can make sugar de-control. This will increase the margins of sugar companies which is positive for the sector," CNI Research CMD Kishor Ostwal said.
The Rangarajan Committee on Friday suggested de-control of the sugar sector by giving freedom to mills to sell their produce in open market and removing the obligation on the industry to supply the sweetener at below market price for ration shops.
Releasing the report, Rangarajan said: "There is a whole gamut of regulations related to the sugar sector. We have looked at all of them and have made key recommendations.
"Levy sugar obligation and administrative control on non- levy sugar need to be dispensed immediately."
He added that this will free the industry from burden of the government's welfare programme.
In the broader market, the BSE benchmark Sensex ended at 18,675.18, down 129.57 points.