The Hindu Business Line : Shree Renuka Sugars plans IPO

Ms Vidya Murkumbi, Executive Chairperson, Shree Renuka Sugars Ltd, with Mr Narendra Murkumbi, Managing Director, at a press conference to announce the company's public issue in Mumbai on Friday. - Paul Noronha

Mumbai , Sept. 30

SHREE Renuka Sugars Ltd (SRSL) is entering the capital market with a public issue of Rs 10 face value equity shares aggregating Rs 100 crore. The issue is being made through a 100 per cent book building process at a price band of Rs 250-300 per equity share.

There will also be a greenshoe option for Rs 10 crore and the issue opens on October 7 and closes on October 14.

The net proceeds from the issue would be used by the Belgaum-based company for increasing cane crushing capacity, increasing the distillery capacity, setting up a co-generation power plant and repayment of loans.

"The company has embarked on expansion projects at an outlay of Rs 128.50 crore to be funded by the IPO proceeds and internal accruals.

"At the Belgaum plant, cane crushing capacity will be expanded from 2,500 tonnes a day to 7,500 tonnes a day at a cost of Rs 63.50 crore and the doubling of distillery capacity to 120 kilo litres a day at an investment of Rs 15 crore," Mr Narendra Murkumbi, Managing Director, SRSL, said while addressing reporters here on Friday.

The company is also setting up a 15-MW co-generation power plant at a cost of Rs 20 crore and a 120 kilo litre a day distillery in Maharashtra at a cost of Rs 30 crore. Also, the company would repay its existing debt of Rs 9.86 crore.

All these projects are slated to commence commercial production in the last quarter of 2006, he said.

SRSL's distillery is among the few equipped to manufacture fuel ethanol from ethanol.

The company exported 2,40,919 tonnes of sugar in the last five years and ranked second in Indian sugar exports. The company had imported about three lakh tonnes of raw sugar last year.

For the nine-month period ended June 30, the company's sales grew by 144.94 per cent to Rs 518.43 crore (Rs 211.65 crore) and profit after tax grew by 224.31 per cent to Rs 32.05 crore (Rs 9.88 crore).

JM Morgan Stanley Pvt Ltd is the book running lead manager and Edelweiss Capital Ltd is co-book running lead manager for the IPO.

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