EID Parry (India) Limited, a prominent player in the sugar refining industry, has announced a significant investment in its wholly owned subsidiary, M/s. Parry Sugars Refinery India Private Limited (PSRIPL). This strategic move involves subscribing to equity shares of PSRIPL on a rights basis, amounting to Rs 350 crore at face value (Rs. 10 per share). The investment is expected to be completed by August 31, 2025, aiming to strengthen PSRIPL’s financial health through debt reduction and enhancement of net worth.

About PSRIPL and Its Business
PSRIPL, incorporated in 2006, operates primarily in the sugar refining sector. Its refinery is situated in the food processing Special Economic Zone (SEZ) at Beach Road, Vakalapudi Village, East Godavari, Kakinada, Andhra Pradesh. Over the past few years, PSRIPL has shown a consistent performance in turnover, with figures standing at Rs 2,81,020 lakhs in FY23, Rs 4,40,082 lakhs in FY24, and Rs 4,26,245 lakhs in FY25. This stable revenue stream indicates the company’s robust presence and growth within the sugar refinery industry.

Nature of Transaction and Regulatory Compliance
The investment by EID Parry in PSRIPL is executed as a rights issue at face value, which qualifies it to be excluded from the definition of a Related Party Transaction as per SEBI regulations. The promoter/promoter group has no additional interest in PSRIPL beyond their existing shares, ensuring this transaction is done at "arm’s length" and does not require additional approvals under Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Purpose and Impact of Investment
The primary objective behind this investment is to reduce PSRIPL’s debt and improve its net worth, which is crucial for enhancing the subsidiary’s financial stability and operational efficiency. This move aligns with EID Parry’s broader strategy of consolidating its business operations and strengthening its balance sheet through targeted funding of subsidiaries. By bolstering PSRIPL’s financial position, EID Parry is likely to facilitate better credit ratings and access to capital, which can further fuel the subsidiary’s growth and expansion plans.

Shareholding and Control
Importantly, this infusion of funds will not alter the shareholding structure of EID Parry in PSRIPL. The subsidiary will continue to be wholly owned by the parent company, ensuring seamless control and management continuity. This consistency in ownership simplifies corporate governance and maintains clear accountability lines within the group.

Financial Health and Industry Position
The sugar refinery sector in India is highly competitive and requires continual capital investment to maintain and upgrade refining technologies, meet regulatory standards, and sustain profitability. PSRIPL’s location in a SEZ provides certain fiscal advantages, which can be optimized with a stronger balance sheet. EID Parry’s timely investment reflects its commitment to sustaining PSRIPL’s market leadership and operational excellence in this industry.

Future Outlook
With the infusion of Rs 350 crore, PSRIPL is well-positioned to manage its debt more effectively, which will lower interest costs and improve profitability over the medium term. Enhanced net worth also allows the company to pursue growth opportunities such as capacity expansion, modernization, or diversification without immediate dependence on external debt.

Moreover, this financial strengthening will have a positive impact on EID Parry’s consolidated financial statements, reflecting better asset quality and reduced financial risk.

In summary, EID Parry’s strategic rights issue subscription in PSRIPL marks a significant step towards enhancing its sugar refinery subsidiary’s financial health. This move will enable debt reduction, boost net worth, and sustain operational growth, thereby supporting long-term shareholder value creation in the sugar refining sector.

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