Shares of the company specializing in manufacturing Sugar, Ethanol, and co-generation of power, dropped nearly 10 percent after SEBI banned some of its promoters for fund diversions and mismanagement, and imposed a fine of Rs.63 crore on the company.
Price Movement
The share price of Rana Sugars Limited dropped by 10 percent, reaching an intra-day low of Rs.21 per share, down from its previous close of Rs.23.32 apiece.
What lead to the fall
SEBI has banned the promoters and officials of Rana Sugars from securities markets for two years and imposed a Rs.63 crore fine over fund diversion and financial misstatements. The order, issued on August 27, found that company funds were misused to benefit the promoters and their families.
Fines include Rs.9 crore for managing director Inder Pratap Singh Rana, Rs.5 crore for chairman Ranjit Singh Rana, and Rs.5 crore for director Veer Pratap Singh Rana
SEBI also instructed Rana Sugars to recover Rs.607 crore from related entities, including Rs.339 crore in receivables and Rs.268 crore in interest dues.
Also read
SEBI’s investigation, covering from FY15 to FY21, resulted in a show-cause notice on August 10, 2023, sent to 15 parties including Rana Sugars and its promoters.
The notice alleged that the company funneled money through intermediary companies Flawless Traders, Century Agros, Jay Aar Builders, RJ Texfab, and RGS Traders, which then quickly passed the funds to individuals like Inder Pratap Singh Rana and others.
The allegations of misusing company funds for personal benefits may damage the long-term reputation of Rana Sugars and its management. This reputational hit can affect future business dealings, partnerships, and customer trust, potentially impacting sales and market position
Production Capacity
Rana Sugars Limited operates three manufacturing facilities with a total cane crushing capacity of 20,500 tonnes per day. These facilities are spread across different locations Moradabad, Rampur (both in Uttar Pradesh), and Amritsar (Punjab).
Financials
Rana Sugars Limited reported poor financial performance for the quarter ending June 30, 2024. The company’s consolidated revenue was Rs. 462.05 crore, down 7.6 percent from Rs. 499.94 crore in the same quarter last year. Additionally, net profit for Q1 FY25 decreased significantly by 87.7 percent to Rs. 1.9 crore, compared to Rs. 15.37 crore in Q1 FY24.
Company Profile
Rana Sugars Limited (RSL) is part of the Rana Group and was established as a joint venture with Punjab Agro Industrial Corporation Ltd. The company operates as an integrated sugar manufacturer with interests in sugar production, ethanol production, and power generation.
Written by – Siddesh S Raskar
Also read
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
