Shares of Murugappa group company EID Parry, engaged in sugar and nutraceuticals manufacturing, rose 6 per cent to ₹352 on the BSE on Wednesday after sale of a small portion of its stake in group company Coromandel International Ltd.
The company sold 58.50 lakh shares of Coromandel International in the open market at an average price of ₹803.1894 a share, EID Parry informed the stock exchanges. Post the deal, EID Parry holds 16.54 crore shares, representing 56.42 per cent of the paid-up capital of Coromandel. As of this September quarter, EID Parry held 58.42 per cent in Coromandel.
The proceeds of the sale will be used to bring down the debt of the company including its wholly-owned subsidiary, Parry Sugars Refinery India Pvt Ltd and for general corporate purposes, it said.
During the September 2020 quarter conference call, the company said it continued debt reduction exercise and cut the debt further by ₹104 crore by repaying some of the long-term loans. Its long-term loan stood at ₹263 crore as of September 2020 quarter when compared with ₹367 crore in the June 2020 quarter. Its short loans were about ₹101 crore as of September 2020 quarter, down from ₹342 crore in the previous quarter. Overall, its loan reduced from ₹720 crore in Q1 to ₹364 crore at the end of Q2.
A recent Crisil Rating report said EID Parry’s arm Parry Sugars Refinery India Pvt Ltd carried an estimated debt of ₹1,187 crore (long term debt of ₹200 crore and short-term debt of about ₹987 crore) as on March 31, 2020. On Wednesday, shares of Coromandel International dropped six per cent to ₹802 on the BSE.