Shree Renuka slumps 10% post deal with Wilmar group

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26 Aug, 2025 12:21

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Moneycontrol Bureau

Shares of Shree Renuka Sugars tanked 10 percent in early morning trade on Friday, as investors do not seem to be impressed by its deal with Wilmar group. As per the deal, Singapore-based agri-business Wilmar group will get joint control of the company along with its promoters and help the sugar company reduce its debt to Rs 2,500 crore.

Renuka Sugars entered into an agreement with Wilmar International through its subsidiary Wilmar Sugar Holdings (WSH), to facilitate the "investment of about USD 200 million" in the primary capital of the company.

In a complex multi-tranche deal, Shree Renuka Sugars will first sell 25.75 crore fresh equity shares to Singapore-based agri-business firm Wilmar International for Rs 517 crore. It will be done through a preferential allotment of preferential shares at a price of Rs 20.08 per share.

Post the preferential issue, the current promoters and WSH will jointly hold 27.5 per cent of Renuka Sugars' expanded equity share capital.

The second step will involve an open offer for up to 26 percent of the expanded equity share capital of the company at a price of Rs 21.89 per share.

Interestingly, the preferential issue for the deal has been announced at a 10 percent discount and open offer at a 2.3 percent discount to the current market price of Shree Renuka Sugars at Rs 22.40 per share.

"The next step would involve Wilmar and the existing promoters of Renuka Sugars jointly participating in a rights issue to raise upto a further Rs 725.4 crore of primary equity capital for Shree Renuka Sugars," Shree Renuka said in a statement.

Narendra Murkumbi, co-founder, VC & MD, Shree Renuka says the main rationale behind the deal is to strengthen the company and ally with a partner who would be there for a log term to facilitate the investment and partnership required for a very long time. (Full interview here)

At 09:32 hrs, the stock was quoting at Rs 20.85, down Rs 1.65, or 7.33 percent on BSE.