India Glycols Ltd (IGL) has announced that the company has acquired 96.6 % stake in Shakumbari Sugar & Allied Industries Ltd for Rs. 47 crore.

Shakumbari Sugar, an Uttar Pradesh-based company has a crushing capacity of 3,200 tonnes per day (TCD) along with a modern distillery of 40 kilo liters per day (KLPD).

While, India Glycols is engaged in the manufacture of MEG (monoethylene glycol), ethoxylates and performance chemicals, glycol ethers and acetates, ethyl alcohol (potable) and industrial gases.

In a statement, the company said, “We will invest Rs 180 crore in the Shakumbari Sugar to enhance its distillery, power generation and crushing capacities. This acquisition is a first step towards attaining a complete backward integration for the company. This would greatly strengthen our position to enable us to operate at an optimum capacity required for a robust growth strategy of ours.”

Lalit Sharma, the company secretary of IGL told that the project will be funded by a mix of debt and internal accruals, of which, debt will have a greater share. The expanded distillery will be able to use molasses as well as sugarcane juice to produce ethanol.

The company presently holds market cap worth Rs. 1257 crore, PE Ratio of 13.63; EPS of 33.09 and BV of 113.69. The firm had showed a net profit of Rs 48 crore for the quarter ended September 2007 as against Rs. 21 crore in same quarter of last year. The stock presently trading at Rs. 450 on NSE is up by 5% compared with previous close of Rs. 429.