The company after market hours yesterday had announced sale of 27.5 per cent stake in the company to Singapore-based Wilmar International for Rs 517 crore.
Renuka would raise another Rs 725 crore from the proposed rights issue in which both existing promoters and Wilmar would participate. A total Rs 1,242 crore raised would be utilised to cut the debt.
Reacting to the development, the stock opened on a weak note at Rs 20.40 and then lost further momentum to touch an early low of Rs 20.25 on the BSE.
However, by the end of trade, the stock was quoted at Rs 21.10, down 6.22 per cent over its previous closing price. In the process, the market capitalisation of the company eroded Rs 74 crore to Rs 1,416 crore.
Experts said the downtrend in the counter was largely on equity dilution concerns after the Wilmar deal. Pursuant to the deal, the Singapore-based agri-business major and the founders of the Indian company would own equal stakes in Shree Renuka.