Shares of Renuka Sugars today slumped as much as 10 per cent in morning trade on the bourses after the company said it will sell 27.5 per cent stake to Singapore-based agri-business major Wilmar International.
The company after market trading hours announced the sale of 27.5 per cent stake in the company to Singapore-based agri-business major Wilmar International for Rs 517 crore.
Reacting to the development, the stock opened on a weak note at Rs 20.40 and then lost further momentum to touch an early low of Rs 20.25 on the BSE.
A similar trend was seen on the National Stock Exchange as well where the stock slipped 10.04 per cent to an early low of Rs 20.15.
Market experts said the downtrend in the counter was largely on equity dilution after the Wilmar deal. Pursuant to the deal, the Singapore-based agri-business major and the founders of the Indian company would own equal stakes in Shree Renuka.
“After issue of fresh shares, Wilmar will have a 27.5 per cent stake in Renuka Sugars, while the promoters stake will also come down to 27.5 per cent,” Renuka Sugars Vice-Chairman and Managing Director Narendra Murkumbi had said yesterday.
Renuka would raise another Rs 725 crore from the proposed rights issue in which both existing promoters and Wilmar would participate. The total Rs 1,242 crore raised would be utilised to cut debt.
The board approved allotment of up to 25.75 crore fresh shares at Rs 20.08 each for Rs 517.04 crore to Wilmar Sugar Holdings (WSH), a wholly-owned arm of Wilmar International, on preferential basis, the company said in a filing to the BSE.