Balrampur Chini Mills' PLA Project Cost Rises to ₹3,080 Crore; Raises ₹450 Cr via Equity
Balrampur Chini Mills' PLA project cost increased by ₹230 crore to ₹3,080 crore due to material costs and supply chain issues. The company will invest ₹160 crore in a new lactogypsum processing plant. To fund these, it will raise ₹450 crore via preferential equity allotment and has an enabling resolution for ₹200 crore debentures. Promoters will maintain a 43% stake.
The capital raise and expansion plans are significant for the company's growth strategy. However, the cost overrun and the need for external funding suggest a moderate impact on financial performance in the short term.
The company is undertaking strategic expansion initiatives with a new product line (gypsum boards) and is securing funding for it, indicating a positive outlook for growth and value addition.
Balrampur Chini Mills Limited held a conference call on April 28, 2026, to discuss updates on its PLA project and capital raising initiatives. The company announced a cost overrun for its PLA project, with the total project cost now estimated at ₹3,080 crore, an increase of ₹230 crore from the initial ₹2,850 crore. This revision is attributed to rising costs of key construction materials, global supply chain disruptions, foreign exchange fluctuations, and refinements in engineering and design.
In addition to the PLA project, the company has approved the establishment of a lactogypsum processing plant at Kumbhi with an investment of ₹160 crore. This plant will convert lactogypsum, a by-product of the PLA manufacturing process, into gypsum boards, with an expected production capacity of approximately 76 lakh boards per annum. Commercial production for this facility is anticipated to commence in 18 months.
To fund these initiatives, the Board has approved a preferential allotment of equity shares worth approximately ₹450 crore at a SEBI price of ₹483 per share. The promoters will continue to hold a 43% stake post-fundraise. An enabling resolution has also been passed for raising debentures of ₹200 crore to ensure financial flexibility. The company expects the PLA plant commissioning to remain on track for Q3, with the lactogypsum plant expected to start commercial production in 18 months.
During the Q&A session, management clarified that the capital raise is intended to ensure adequate liquidity, maintain credit ratings, and avoid disruption of financial ratios, especially with the upcoming sugar season requiring significant cane purchases. The lactogypsum plant is projected to generate an annual revenue of around ₹150 crore with an expected payback period of 5 years. The company also indicated potential future plans to monetize its NBFC stake, Auxilo, to further deleverage its balance sheet.
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See the model portfoliosA plain-language summary of a public exchange filing by Balrampur Chini Mills Limited. Read the original for the full detail.