The stock was last trading at Rs 21.05 on the National Stock Exchange.
The Leading sugar firm said it will sell 25.75 crore fresh equity shares to Singapore-based agri-business firm Wilmar International for Rs 517 crore in order to reduce the company's debt.
"The company's board of directors have approved issue and allotment of up to 25,74,91,592 equity shares for a price of Rs 20.08 per share aggregating to Rs 517.04 crore to Wilmar Sugar Holdings Pte Ltd on preferential basis," Shree Renuka Sugars said in a filing to the BSE.
Investors see the deal as further dilution to the already large equity. In any case sugar stocks have been out of favour with investors, thanks to regulations that are currently not too favourable.