Penny Stock: Davangere Sugar Company Limited (DSCL) will remain under the spotlight in Monday’s trading session after the company announced a major capex expansion plan on August 29, 2025.
On Friday, DSCL shares jumped 6.73%, closing at ₹3.49 per share. The penny stock has shown sharp volatility in recent months—gaining 9.40% in one month but sliding 26% over the past six months.
📌 Key Takeaways
- DSCL shares closed at ₹3.49 on Friday, up 6.73%.
- Company announced ethanol capacity expansion to 110 KLPD.
- Rights issue worth ₹149.22 crore recently concluded.
- Expansion includes CO₂ recovery, grain trading, and farmer empowerment.
- Aims to crush over 5 lakh MT sugarcane consistently in coming years.
🌱 DSCL’s Big Capex Expansion Plans
In a release dated August 29, the company revealed that it is preparing for a transformative growth phase. DSCL plans to leverage:
- Favorable government ethanol policies
- Rising ethanol demand
- Strong farmer partnerships
This expansion aligns with India’s push toward cleaner fuels and rural industrialisation.
⚡ Expansion in Ethanol & CO₂ Recovery
Ethanol is at the heart of DSCL’s growth strategy. Supported by the Ethanol Blending Program (EBP) and government’s clean energy push, the company is moving aggressively.
📊 Ethanol Capacity Expansion Roadmap
| Year / Plan | Capacity (KLPD) | Additional Projects |
|---|---|---|
| Current | 65 KLPD | – |
| FY26 | 85 KLPD | Expansion phase 1 |
| Future Plan | 110 KLPD | + 35 TPD CO₂ recovery plant |
👉 These investments will create new revenue streams and ensure DSCL remains aligned with India’s ethanol roadmap.
To maintain year-round production, DSCL plans to diversify feedstock by sourcing broken rice and maize, reducing dependence solely on sugarcane. Alongside this, the company is entering grain trading—a strategic move that could unlock an additional revenue channel.
👨🌾 Empowering Farmers & Boosting Cane Acreage
DSCL is not just expanding capacity—it is also strengthening its farmer ecosystem. The company announced a plan to increase sugarcane cultivation by 15,000 acres this year.
🌾 Farmer-Centric Initiatives
- 🚜 Mechanised Harvesting – Reduce labor costs & improve efficiency.
- 🚛 Organised Cane Transport – Streamline logistics, ensure timely supply.
- 💰 Subsidies & Incentives – Reward high-performing farmers, boost income.
With these initiatives, DSCL expects to consistently surpass 5 lakh MT of sugarcane crushing in the coming years. This growth will create a multiplier effect across its sugar, ethanol, and power businesses.
🏭 Integrated & Sustainable Business Model
DSCL prides itself on operating a zero-waste, fully integrated business model. Every input—from sugarcane to grain—is utilised for multiple outputs, ensuring efficiency, sustainability, and profitability.
📢 CMD Ganesh Shivashankarappa Shamanur said:
“Davangere Sugar is at a turning point. With expansions in ethanol, grain procurement, cane cultivation, and farmer-friendly initiatives, we are building a robust model that strengthens revenues, profitability, and shareholder value. Our integrated operations ensure environmental sustainability and rural prosperity.”
💸 DSCL Rights Issue 2025
To fund its ambitious expansion, DSCL recently concluded a Rights Issue, which was open between August 14 and August 29, 2025.
📊 Rights Issue Details
| Particulars | Details |
|---|---|
| Issue Size | ₹149.22 crore |
| Price Per Share | ₹3.05 |
| Total Shares Issued | 48,92,39,202 equity shares |
| Entitlement Ratio | 13:25 |
| Record Date | August 6, 2025 |
👉 Shareholders received 13 rights shares for every 25 fully-paid equity shares held.
This capital infusion will support DSCL’s ethanol expansion, CO₂ recovery projects, and farmer empowerment programs.
📈 DSCL Share Price Performance
The stock has seen wild swings in 2025.
📊 Price Performance Snapshot
| Period | Performance |
|---|---|
| 1 Month | +9.40% |
| 3 Months | -15% |
| 6 Months | -26% |
| 1 Year | +18% |
While DSCL remains a penny stock below ₹5, its expansion plans and rights issue infusion have attracted fresh investor attention.
🔮 Outlook for Investors
The future of DSCL largely depends on three key growth drivers:
- Ethanol Demand – As India targets higher blending levels, companies with ethanol capacity will benefit.
- Government Policies – Subsidies, blending mandates, and incentives will directly impact revenues.
- Farmer Engagement – Expanding sugarcane acreage and farmer incentives will ensure raw material availability.
✅ If DSCL executes its plans effectively, it could transition from a volatile penny stock into a long-term growth story. However, risks remain due to commodity price fluctuations, monsoon dependency, and execution challenges.
⚠️ Investor Advisory
📢 Disclaimer: This story is for educational purposes only. The analysis above is based on company announcements and public data. It should not be treated as financial advice. Investors must consult certified advisors before making any decisions.
📝 Conclusion
Davangere Sugar Company (DSCL) is entering a transformative growth phase. With ethanol capacity expansion, CO₂ recovery projects, farmer empowerment, and fresh capital from its ₹149.22 crore rights issue, the company is positioning itself for the future.
While the share price remains highly volatile, DSCL’s strong roadmap, farmer-first initiatives, and alignment with India’s ethanol policy make it a stock to watch closely in the coming years.
🌟 In short: From being just another penny stock, DSCL is attempting to script a new growth story in India’s renewable fuel and rural industrialisation journey.
