Penny stock under ₹5: Davangere Sugar Company (DSCL) share price will remain in focus in Monday’s trading session after the company announced capex expansion plans on August 29.
On Friday, Davangere Sugar Company shares were up 6.73 per cent to close at ₹3.49 apiece. The penny stock has remained volatile in near-term as it gained over 9.40 per cent in a month, however, has descended 26 per cent in six months.
Davangere Sugar Company Capex expansion plans
In a release dated August 29, the company said that it gearing up for a transformative phase of growth, leveraging a favourable government policy, rising ethanol demand, and deep-rooted farmer partnerships as India accelerates its transition toward cleaner fuels and rural industrialisation.
Expansion in ethanol and CO2 recovery
DSCL’s current growth strategy is anchored in the rapid expansion of its ethanol production capacity, supported by India’s Ethanol Blending Program (EBP) and the government’s strong policy thrust towards cleaner fuels. With the EBP gaining momentum, DSCL is set to increase its current 65 KLPD (kilo litres per day) ethanol capacity to 85 KLPD within FY26, with a further expansion plan to reach 110 KLPD, coupled with a 35 TPD CO₂ recovery plant in the pipeline.
These investments align DSCL with the government’s ethanol policy and roadmap, provide additional revenue streams to the company.
Ensuring consistent feedstock supply and year-round production, the company plans to diversify procurement by tapping into broken rice and maize, allowing it to not only meet its own raw material requirements. But also focus on grain trading vertical—a strategic move aimed at unlocking fresh revenue streams.
Empowering Farmers, Boosting Cane Acreage
In a bid to strengthen its supply chain and deepen rural engagement, DSCL is also launching a major push in sugarcane cultivation. The company aims to expand cultivation by 15,000 acres this year alone.
Key to this strategy is a package of farmer-centric initiatives:
⦁ Mechanised harvesting systems to reduce labour costs and improve farm productivity.
⦁ Organised cane transport solutions to streamline logistics and ensure timely supply.
⦁ Subsidies and performance-linked incentives to reward farmers and boost incomes.
These efforts are projected to help DSCL surpass 5 lakh metric tonnes of sugarcane crushing consistently in the coming years, creating a multiplier effect across its sugar, ethanol, and power businesses, the company said in the release.
“Davangere Sugar is at a turning point in its growth journey. With expansions in ethanol, aggressive grain procurement, increased cane cultivation, and farmer-friendly initiatives, we are creating a robust growth model that strengthens revenues, profitability, and long-term shareholder value. The company’s zero-waste, fully integrated operations ensure every input—from sugarcane to grain—is utilised optimally, contributing to both environmental sustainability and rural prosperity,” said Ganesh Shivashankarappa Shamanur, Chairman & Managing Director of Davangere Sugar Company Limited expressed.
Davangere Sugar Company rights issue
Davangere Sugar Company announced its Rights Issue, which opened on August 14, and closed on August 29. The record date for the Rights Issue was set for August 6.
The company issued 48,92,39,202 equity shares at a price of ₹3.05 per share, aggregating to ₹149.22 crore. The entitlement ratio was set at 13:25, meaning shareholders will be eligible for 13 rights shares for every 25 fully-paid equity shares held on the record date.
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