Should investors re-invest buyback money from Dhampur Sugar in sugar stocks?

Dhampur Sugar Mills, in lieu of its recently opened share buyback, has come up with a clarification saying that the intimation of acceptance as well as rejection of equity shares tendered in the share buyback has been dispatched electronically by Registrar to the Buyback i.e. Alankit Assignments Limited to the eligible Equity Shareholders today i.e. June 11, 2025. 

“The settlement of all valid bids was completed by the Indian Clearing Corporation Limited and the National Securities Clearing Corporation Limited (collectively, “Clearing Corporations”) as applicable, on June 10, 2025. The Clearing Corporations have made direct funds pay out to Eligible Shareholders whose Equity Shares have been accepted under the Buyback.” said the company’s exchange filing.

If any Eligible Shareholders’ bank account details were not available or if the funds transfer instruction was rejected by Reserve Bank of India or respective bank, due to any reason, then such funds were transferred to the concerned Stockbrokers’ settlement bank account for onward transfer to such Eligible Shareholders, it added.

Now as some of the investors’ shares must have been accepted in the buyback and they would have gained some amount on their investments, here is a quick take on whether or not should investors park their buyback money in sugar stocks.

Should investors re-invest buyback money from Dhampur Sugar in sugar stocks?

Importantly and notably,  the overall acceptance ratio in a buyback can differ from the buyback acceptance for small investors. Looking at one of the investor’s intimation on the share buyback, the acceptance ratio came to be 21 per cent as out of the total 296 equity shares tendered only 63 got accepted.

So, given the gains on the tendered shares, Sourav Choudhary, Managing Director, Raghunath Capital, AIF Category III Fund suggest taking bet on the sector again but on stocks that have the potential to capture value across both food and fuel use cases.

The expert noted, “Dhampur Sugar’s buyback is a timely value unlocking opportunity, and we view it as a tactical move for investors to benefit from near-term capital return while staying positioned for the broader sugar sector upcycle. With global supply tightening from major producers like Brazil and Thailand, and strong domestic demand driven by ethanol blending targets, the outlook for Indian sugar companies remains constructive.”

Post buyback, we see merit in reallocating capital to well-managed names such as Balrampur Chini, EID Parry, and DCM Shriram, which are well-placed to capture value across both food and fuel use cases. The sector is entering a structurally favorable phase, and selective exposure can deliver strong medium-term returns, he added.