Globus Spirits Share Price Hits Two-Month High On Rice Price Cut

Share price of Globus Spirits Ltd. surged over 17% on Monday after the Ministry of Consumer Affairs, Food & Public Distribution reduced the price of rice for supply of ethanol distilleries.

The ministry had reduced the price for rice for ethanol distilleries to Rs 22.50 per kg from the initial Rs 28 per kg, according to the exchange filing on Monday. The ministry made this announcement in a notice dated Jan. 17.

In addition, the center on Friday reduced the reserve price of FCI rice under the Open Market Sale Scheme to Rs 2,250 for states and ethanol producers in order to boost sales and support food security measures. According to the order, ethanol distilleries were allowed to buy 24 lakh tonnes at the reduced rate and this will be in place until June 30, 2025.

The ministry has also mandated that the third cycle tender for close to 110 crore liters of ethanol during this fiscal should use the Food Corporation of India's rice, with preference given to the old rice stocks that are feasible.

Share price of Globus Spirit rose as much as 17.09% to Rs 871 apiece, the highest level since Nov. 13. It pared gains to trade 14.66% higher at Rs 912.90 apiece, as of 11:27 a.m. This compares to a 0.50% advance in the NSE Nifty 50.

The stock has risen 10.53% in the last 12 months. Total traded volume so far in the day stood at 23 times its 30-day average. The relative strength index was at 60.

The one analyst tracking the company maintains a 'buy' rating, according to Bloomberg data. The average 12-month analysts' consensus price target implies an upside of 73.2%.