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It is 9:30 am on 26 December 2022.

Ved Prakash Singh, 55, is growing impatient as there is still no sign of his morning tea. He owns two cows, but today the household has run out of milk. His 17-year-old son, who had to drop out of school in 2022 to sell milk, forgot to leave some for the family before going to the market.

Singh grows sugarcane in Uttar Pradesh’s Bilai village—nearly 180 km north of India’s capital, New Delhi. Thousands of sugarcane growers like him in the area sell their produce to Bajaj Hindusthan Sugar, one of India’s largest sugar companies. But the farmers last received full payment for their produce in 2020. As of 3 January, the company owes more than Rs 1,100 crore (~US$135 million) to them.

The farmers have reached a breaking point, with schools not extending fee-submission deadlines and neighbourhood grocery stores refusing to sell goods on credit to them.

Two hours later, Singh and 20 other farmers are outside Bajaj Sugar’s mill in the village to demand payment of their dues. Most of them have arrived on motorcycles, and some on bicycles. Two more farmers are yet to reach. “They’re haggling with recovery agents over unpaid electricity bills,” says Singh.

The group proceeds without them. They walk past senior officials’ cars parked inside the mill compound. The farmers are here to meet one of them.

“Share prices are up. You’ve paid the banks. What about us?” Singh starts the conversation inside the senior official’s cabin.

The official, a middle-aged man in a grey suit, asks his junior to get tea for everybody. He pauses, smiles, and adds, “Make sure you add sugar.”

During the last five months, Bajaj Hindusthan Sugar’s stock prices have mirrored Bilai’s bumpy lanes.

On 17 August 2022, the company’s shares fell by almost 14% in early trade. A day before, the company informed the exchanges that India’s largest public-sector lender, State Bank of India (SBI), had declared its accounts non-performing assets (NPA). The lender also moved the National Company Law Tribunal (NCLT)—a special court set up to deal with corporate defaults—to initiate insolvency proceedings against the sugar company.

Come 2 December 2022, the sugar major’s stocks closed at a 20% high. In an exchange filing, the company said it had paid the entire overdue amount of ~Rs 140 crore (~US$17 million) and had regularised its accounts with the SBI. Bajaj Sugar owes over Rs 4,600 crore (~US$560 million) to an SBI-led consortium of 12 state-owned banks.

This wasn’t Bajaj Sugar’s maiden default. The company’s balance sheet has been a cause for concern for over a decade. It last recorded annual profits in September 2012—the year Congress leader Pranab Mukherjee was elected India’s president. For the quarter ended September 2022, it posted a loss of ~Rs 160 crore (~US$20 million). Interest payments have consistently surpassed its operating profit, and independent auditors have raised concerns over the company’s ability to continue.


Rounak Kumar Gunjan

Starting out as a business journalist in 2016, Rounak has written about energy, politics, social justice and financial services. He has worked with BQ Prime, CNN-News18, Outlook Money and NewsCorp VCCircle.

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