Modi Naturals hit an upper circuit limit of 10% at Rs 188.95 after the company said it has decided to establish an Ethanol plant in Chhattisgarh.
For the project, Modi Naturals (MNL) has incorporated a 100% subsidiary (wholly owned subsidiary) called Modi Biotech (MBPL).MBPL has received an in-principle approval for a 210 KLD distillery for manufacturing ethanol from the central government, along with signing an MoU with the Chhattisgarh government.
The investment over the next two years is expected to be approximately Rs 250 crore, with the first phase of 110 KLD being completed within a year with an investment of Rs 160 crore.
The project will be funded with a combination of internal accruals & debt for which the company has already received the inprinciple approval from its banks.
The company has already purchased land for the project and is in the process of ordering plant and machinery, and aims to commission the plant in the 3rd quarter of the next financial year FY 22-23.
Bioethanol is the most significant biofuel in today's economy, accounting for 65% of worldwide biofuel output.
The government has allowed 20% ethanol blending with gasoline and has directed public sector oil marketing companies (OMCs) to sell ethanol-blended petrol. This program, in which OMCs sell petrol blended with ethanol, has been extended to the entire country.
In order to fulfill the PM's vision, 1200 crore litres of alcohol (for all uses) would be required per annum, requiring a distillation capacity of 1400 crore litres per annum across the country.
Currently India's distillation capacity is only 787 crore litres per annum, thereby requiring the doubling of capacity in the next 3-4 years, giving an immense boost to the sector, the company said.
Net profit of Modi Naturals rose 424.56% to Rs 2.99 crore on 26.65% rise in net sales to Rs 113.74 crore in Q2 September 2021 over Q2 September 2020.
Modi Naturals is engaged in manufacturing and marketing of edible oils and de-oiled cakes. Its consumer products' brands include Oleev, Olivana, Rizolo and Miller.
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