E.I.D. Parry (India) Limited announced the immediate closure of its wholly-owned subsidiary’s (PSRIPL) refinery unit effective March 31, 2026. The decision follows persistent structural and external challenges, including high finance costs and reduced refining premiums, leading to accumulated losses of Rs. 1,406 Crores as of March 31, 2025. Simultaneously, the Board approved a Rs. 610 Crore investment and a Rs. 130 Crore inter-corporate loan for PSRIPL.
Closure of PSRIPL Refinery Unit
The Board of Directors of E.I.D. – Parry (India) Limited approved the closure of operations for the refinery unit of its wholly owned subsidiary, M/s. Parry Sugars Refinery India Private Limited (PSRIPL), effective from the close of business on March 31, 2026. The refinery, established in 2006 as an export-oriented unit, was built on importing raw sugar and capitalizing on global white sugar premiums.
Deteriorating Business Fundamentals
The business model faced material erosion due to several structural shifts. Key factors leading to the closure include:
- Increased Costs: Non-availability of natural gas forced investments in coal boilers, significantly increasing operating costs.
- Reduced Revenue: Sharp declines in white sugar premiums reduced spreads, and power export revenue dropped to one-third of projections.
- Financial Strain: The cumulative impact of shutdowns, demurrage charges, inventory write-off, and high finance costs resulted in significant losses.
- Accumulated Losses: As of March 31, 2025, accumulated losses reached approximately Rs. 1,406 Crores.
The refinery was deemed structurally unviable due to sustained losses, high external borrowings (total liabilities estimated at Rs. 998 crores as of March 31, 2026), and deteriorating financial health.
Financial Support and Provisioning
To manage the liabilities, the Company anticipates settling Rs. 137 crores of the bank borrowings (out of Rs. 877 crores backed by the Company). The remaining Rs. 740 crores will require settlement through funds infused by the parent company.
In light of the closure, the Company expects to:
- Create a provision of approximately Rs. 655 crores across FY 2025-26 and FY 2026-27 for fresh equity/loan infusion required for settlements.
- Impair the current carrying value of its investment in PSRIPL, amounting to Rs. 46 crores.
Investment Decisions for PSRIPL
Despite the closure decision, the Board also approved measures to support PSRIPL in meeting its liabilities:
- Investment Approval: Approval for an investment up to Rs. 610 Crores in PSRIPL shares on a rights basis (at face value of Rs. 10/-). The turnover for FY 2024-25 was Rs. 4,262.45 Crores, representing 13.48% of the company’s revenue.
- Inter-Corporate Loan: Approval for an inter-corporate loan up to Rs. 130 Crores to PSRIPL. The loan agreement is yet to be executed, and the security provided is Unsecured.
The investment of Rs. 610 Crores is expected to be completed by May 31, 2026. These funds will be utilized by PSRIPL to meet its various liabilities and commitments.
Background of PSRIPL Operations
PSRIPL’s refinery commenced commercial operations in FY 2014-15 after initial delays due to gas non-availability. The closure follows severe profitability erosion exacerbated by high freight costs due to its East Coast (Kakinada Port) location and unfavorable global market conditions. PSRIPL’s turnover for the last three reported years was:
- March ’23: Rs. 2,87,020 Lakhs
- March ’24: Rs. 4,40,082 Lakhs
- March ’25: Rs. 4,26,245 Lakhs
The meeting concluded at 7:00 pm on March 31, 2026.
Source: BSE
