Shree Renuka Sugars rallies on new subsidy scheme buzz

NEW DELHI: Shares of Shree Renuka Sugars rallied 5 per cent on morning trade on Thursday to Rs 10.66 continuing with the winning spree after a 14 per cent surge on Wednesday.

The stock has been reacting to reports that the government was working on a new subsidy scheme to be implemented in the ongoing 2015-16 sugar season to boost export of surplus sugar and help mills clear dues of over Rs 12,000 crore to farmers.

Sugar demand is projected to outstrip supplies in 2015-16, which has triggered a spurt in sugar prices. Globally, sugar prices have moved up substantially and even domestic prices are expected to follow the trend.

The stock traded at Rs 10.55, up 4.46 per cent, on the NSE. Some 62,98,607 shares changed hands in the first hour of trade.

The largest sugar producer of the country last week declared its Brazilian unit bankrupt and filed for protection, becoming the first casualty of slowing business cycle in Brazil, where Indian businesses have been severely hit in recent years.

"Shree Renuka do Brasil Participacoes (SRDBPL), together with all of its subsidiaries, has filed for protection under judicial recovery in the designated court in the capital of the state of Sao Paulo," Renuka Sugars said in a filing to the BSE. Shree Renuka Sugars has two major subsidiaries in Brazil—Renuka do Brasil SA in Sao Paulo and Renuka Vale do Ivai SA in Parana.

Investors have spotted value in the stock, which has been ruling near its 52-week low. There was brisk activity on the counter on Wednesday morning with the traded volume rising to 81,95,256 shares in the first hour of trade.