Dairy firms rally on government's ₹4,558 crore scheme for sector

Mumbai: Shares of dairy firms rose 1.5-10% after the Union Cabinet on Wednesday approved a ₹4,558 crore scheme to promote the sector.

Prabhat Dairy rose 1.6% to ₹84.65, Vadilal Industries gained 1.7% to ₹840, Hatsun Agro climbed 2.5% to ₹665.90 and Umang Dairies jumped 9.4% to ₹49.30

Briefing reporters, Information and Broadcasting Minister Prakash Javadekar said this scheme will take the "white revolution" to the next level. The Cabinet also decided to raise the benefit under the interest subvention scheme to 2.5% from 2%.

The increased interest subsidy under Dairy processing and Infrastructure Development Fund (DIDF) will be given to Nabard from 2019-20 (with effect from July 30, 2019) to 2030-31. In case there is an increase in the cost of funds, it would be borne by the borrower, according to an official statement.

"The funding period (2017-18 to 2019-20) of the scheme is revised to 2018-19 to 2022-23 and the repayment period to be extended up to 2030-31 with spillover to first quarter of the FY 2031-32," said the statement.

The move would benefit 9.5 million milk producers spread over 50,000 villages.