Divya Agarwal
New Delhi [India], September 10: Shares of Davangere Sugar Company Ltd. rose around 6% during trading on September 10, touching an intraday high of ₹1.85 apiece on the NSE, compared with its previous close of ₹1.75. The stock has traded between a 52-week high of ₹5.50 and a 52-week low of ₹1.74.
Based on the company’s recently expanded paid-up capital and the prevailing share price, Davangere Sugar falls in the small-cap segment, with its market capitalisation estimated at around ₹300–₹320 crore.
The Karnataka-based company operates an integrated business model spanning sugar manufacturing, ethanol production and co-generation of power. Its recent corporate developments have brought increased investor attention to its expansion plans, capital raising and efforts to build an international business platform.
Davangere Sugar reported revenue of ₹238.8 crore for FY26, representing an increase of 11.1% year-on-year. EBITDA stood at ₹50.7 crore, translating into an EBITDA margin of approximately 21.2%.
The company’s distillery business emerged as the largest contributor to revenue during the year, generating ₹133.5 crore. The sugar segment contributed ₹98.9 crore, while co-generation contributed ₹7.1 crore.
The increasing contribution from the distillery business highlights the company’s strategy of diversifying beyond traditional sugar manufacturing and increasing its exposure to ethanol and value-added products.
The company reported revenue of ₹34.7 crore during the first quarter of FY27, marking a 44.2% year-on-year increase.
The distillery segment also remained an important contributor, with segment PBIT reported at ₹15.8 crore. The performance comes as the company continues to scale its ethanol production capabilities and utilise multiple feedstocks.
One of the company’s significant recent corporate developments has been its $100 million Foreign Currency Convertible Bonds (FCCBs) issue.
The issue comprises 1,000 unsecured FCCBs with a face value of $100,000 each. The bonds carry a 2% coupon and have a five-year tenor, with a conversion price of ₹3.60 per equity share.
The FCCBs were listed on the Afrinex Exchange in Mauritius in July 2026. According to the company’s disclosures, the first tranche of the issue was converted on August 25, resulting in the issuance of approximately 26.59 crore new equity shares. Following the conversion, the company’s paid-up capital increased to around ₹169.59 crore.
The proceeds are expected to provide the company with long-term capital for its expansion initiatives.
Davangere Sugar has also approved the deployment of approximately $84.95 million into its wholly owned UK subsidiary, Aurevant Global Ltd.
The proposed deployment, funded through the FCCB proceeds, is intended to support opportunities in the global sugar and ethanol markets, including potential mergers and acquisitions.
The move represents a strategic expansion beyond the company’s established Karnataka-based operating footprint and could provide access to international business opportunities in the sugar and ethanol value chain.
Another development being tracked by investors is the proposed conversion of unsecured promoter loans into convertible warrants.
The promoters are set to convert loans worth approximately ₹40.12 crore into 10.64 crore convertible warrants at an issue price of ₹3.77 per warrant.
If fully converted, the transaction is expected to increase promoter shareholding from approximately 41.63% to 45.67%.
The proposed conversion could also reduce the company’s outstanding unsecured loan obligations while increasing promoter participation in the company’s equity capital.
Davangere Sugar currently operates a sugarcane crushing capacity of around 4,750 tonnes crushed per day (TCD), along with 24 MW of co-generation capacity.
Its distillery has a multi-feed capacity of 65 KLPD, with plans to scale this to 110 KLPD. The facility can utilise feedstocks including molasses, cane juice and grain.
The company also has a Zero Liquid Discharge system and a carbon dioxide recovery plant as part of its operating infrastructure.
The expansion of distillery capacity is particularly relevant as ethanol continues to become an increasingly important component of India’s sugar industry.
