E.I.D. – Parry (India) Limited announced the immediate closure of its wholly-owned subsidiary’s, Parry Sugars Refinery India Private Limited (PSRIPL), refinery unit effective March 31, 2026. The decision stems from unsustainable structural challenges, including high finance costs and eroded profitability margins. To manage liabilities, the Board approved an investment of up to ₹610 crores and an inter-corporate loan of up to ₹130 crores to PSRIPL.
Closure of PSRIPL Refinery Operations
The Board of Directors of E.I.D. – Parry (India) Limited, following approval from the subsidiary’s board, has sanctioned the closure of the operations of M/s. Parry Sugars Refinery India Private Limited (PSRIPL), effective from the close of working hours on March 31, 2026.
Rationale for Structural Closure
The sugar refinery, established in 2006 in Kakinada as an export-oriented unit, faced persistent challenges eroding its original commercial viability. Initial assumptions regarding global white sugar premiums and assured natural gas availability did not materialize. Key issues leading to the closure include:
- Non-availability of natural gas, necessitating costly investments in coal boiler infrastructure.
- Sharp decline in white sugar premiums, causing power export revenue to drop to one-third of projections.
- Significant accumulated losses, reaching approximately Rs. 1,406 Crores as of March 31, 2025, coupled with high finance costs and inventory write-offs.
- The business is deemed no longer structurally viable due to current and potential internal and external challenges.
Financial Impact and Liability Management
As of March 31, 2026, PSRIPL’s total estimated liabilities amount to Rs. 998 crores, which includes Rs. 877 crores in bank borrowings supported by the parent company. Based on asset realization estimates, PSRIPL anticipates settling only Rs. 137 crores of these borrowings. The remaining Rs. 740 crores must be settled by the parent company.
To meet these obligations, the Board has approved substantial financial support:
- Investment: Approval for an investment of up to Rs. 610 crores in the equity shares of PSRIPL in one or more tranches. The funds will be utilized by PSRIPL to meet its liabilities. The latest audited turnover for FY 2024-25 was Rs. 4,262.45 crores (accounting for 13.48% of the Company’s revenue).
- Inter-Corporate Loan: Approval for an inter-corporate loan of up to Rs. 130 Crores to PSRIPL. This loan agreement is yet to be executed and will be Unsecured.
The Company estimates needing to create a provision of approximately Rs. 655 crores across FY 2025-26 and FY 2026-27 for the equity/loan infusion. Furthermore, the Company will impair the current carrying value of its investment in PSRIPL, amounting to Rs. 46 crores.
Transaction Details (Acquisition/Investment)
The investment of Rs. 610 crores is a subscription to the equity shares of PSRIPL, a wholly owned subsidiary, at its face value of Rs. 10/- on a rights basis. This transaction is exempted from Related Party Transaction approval requirements. The investment is expected to be completed by May 31, 2026.
The refinery unit’s turnover for the last three years (in Lakhs) was:
- March ’23: 2,87,020
- March ’24: 4,40,082
- March ’25: 4,26,245
The Board meeting commenced at 2:00 pm and concluded at 7:00 pm on March 31, 2026.
Source: BSE
