Renuka Sugars hits 52-week high on Wilmar buzz

The Share price of Shree Renuka Sugars (SRSL), the country’s largest sugar refiner, rose to a 52-week high on Wednesday, with rumours of global agri commodity trader Wilmar International raising its stake in the company. The sugar major is undergoing a mega restructuring plan.

SRSL’s share went up to Rs 22.50, its 52-week high on the National Stock Exchange, before falling 6.5 per cent to close at Rs 20.29.

Singapore-based Wilmar Sugar Holdings, a Wilmar International group company, was roped in by SRSL in 2014. It acquired 27.24 per cent promoter stake at around Rs 1,200 crore, which reduced the shareholding of the Narendra Murkumbi-led SRSL promoters to 27.24 per cent.

SRSL's board of directors meet on Thursday to decide on fund raising in one or more tranches that could include a further public offer, rights issue, global depository receipts (GDR), preferential issue or any other method, SRSL said in a BSE filing. The company spokesperson neither confirmed nor denied the possible Wilmar deal. If this does happen, it could trigger an open offer for shares. Wilmar’s fresh capital infusion would help SRSL reduce its debt of Rs 3,518 crore on a standalone basis and Rs 9104 crore on a consolidated basis (for FY16).

SRSL has been making losses for four years on both a consolidated and standalone basis. For FY17, net standalone loss was Rs 123.9 crore on turnover of Rs 7,772 crore. On a consolidated basis, the net loss was Rs 1,039.7 crore on a turnover of Rs 11,844 crore. The consolidated net worth eroded to a negative 3,765 crore for FY16.

Foreign institutional investors (FIIs) have reduced their stake to 2.7 per cent, from 7.6 per cent in December 2014. Mutual funds have exited over the past 30 months from a cumulative stake of three per cent at the time. In the same period, holdings of small investors have increased, to 28.6 per cent at end-June, from 22.6 per cent in end-December 2014. 

Financial institutions have also increased their stake since December ’14, from 2.3 per cent to four per cent now.