Shree Renuka Sugars surges as govt prepares new subsidy scheme

NEW DELHI: Shares of Shree Renuka Sugars closed the day 18.1 per cent higher at Rs 10.12 on Wednesday amid reports that the government was working on a new subsidy scheme to be implemented in the current 2015-16 sugar season to boost export of surplus sugar and help mills clear dues of over Rs 12,000 crore to farmers.

Another report said demand for sugar will outstrip supplies in 2015-16, which has triggered a surge in sugar prices. Globally, sugar prices have moved up substantially and even domestic prices are expected to follow the trend.

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.