Kaveri Seed slips nearly 3% as promoters plan stake sale

NEW DELHI: Kaveri Seed Company Ltd slipped as much as 2.88 per cent in trade on Monday, after the promoters of India's second largest hybrid cotton seeds producer, have expedited plans to sell stake in the company to part fund their foray into food processing business, ET reported two people aware of the development said.

The move comes after key investors in the listed entity turned down the promoters' proposal to make heavy investments in exotic vegetables and culinary herbs subsidiary Kex-Veg India, one of the people quoted above said.

At 09:45 a.m.; the stock was trading 2.6 per cent lower at Rs 896. It hit a low of Rs 895 and a high of Rs 922 in trade today.

"Following resistance from the existing institutional investors of Kaveri Seed in the backdrop of not so encouraging returns in exotic vegetables business, the promoters, who are upbeat on long-term prospects, have decided to proceed on their own," this person said on condition of anonymity.

The person said the promoters are now looking at floating a closely-held food processing venture involving an investment of around Rs 1,500 crore through a combination of debt and equity.