[30 September 2005]
Shree Renuka Sugars 100% Book Building IPO to Open on 7th October, 2005

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Shree Renuka Sugars Ltd. is entering the capital market with the Public Issue of Equity Shares of Face Value of Rs.10 each for cash at a premium aggregating Rs.100 crores. There will also be a green shoe option aggregating Rs.10 crores. The Issue is being made through a 100% Book Building process and the price band is Rs.250 to Rs.300 per Equity Share.

The Bid/Issue Opens on 7th October, 2005 and Closes on 14th October, 2005.

The Equity Shares are proposed to be listed on The National Stock Exchange of India Ltd. and Bombay Stock Exchange Limited. JM Morgan Stanley Pvt. Ltd. is the Book Running Lead Managers and Edelweiss Capital Ltd. is Co-Book Running Lead Managers for the IPO.

The core promoters of the Company are Mrs. Vidya Murkumbi (Executive Chairperson); Mr. Narendra Murkumbi (Managing Director) and Murkumbi Industries Private Limited, and Murkumbi Bioagro Private Limited. Mr. Narendra Murkumbi is an engineer and has a Post Graduate Diploma in Management from Indian Institute of Management, Ahmedabad. Unlike other privately owned sugar companies, it has nearly 9000 farmers as its shareholders.

The Company is a fully integrated player and processes sugarcane into three co-products viz. sugar, ethanol and power and its plants are located in high yield and high recovery cane producing regions. It owns and operates a 2500 TCD Sugar Mill in Munoli at Belgaum in Karnataka with a 20.5 MW co-generation plant, a 60 KL ethanol distillery and a 1000 TPD raw sugar processing refinery, the largest refinery in India.

The Company’s refinery employs superior technology and was set up with technical assistance from Tate & Lyle of UK, Europe’s largest sugar refiner and it has a MOU with them for technical assistance on an on-going basis.

This plant is designed so that sugar cane be produced not only from sugarcane but also from raw sugar. This unit manufactures EC II grade refined sugar conforming to European standards, with negligible sulphur content, which is preferred by industrial buyers and generally commands a premium over plantation white sugar.

Its distillery is among the few equipped to manufacture fuel ethanol from ethanol. GOI is encouraging the use of fuel ethanol as motor fuel since it is considered to be less polluting and also a renewable source of energy.

In 2004, the Company entered into a 2-year lease agreement with the 2500 TCD Ajara Cooperative Sugar Factory, in Maharashtra. In July 2005, the Company entered into a 6-year agreement with Mohanrao Shinde Cooperative Sugar Factory (Unit III) to operate the sugar mill and co-generation power plant, also in Maharashtra.
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The Company has a focus towards corporate and industrial buyers and corporate sales constituted 68.35% of the Company’s total sugar sales of FY04 and key customers include Coca Cola, Nestle, Cadbury, etc.

The Company has a wholly owned subsidiary Renuka Commodities DMCC, incorporated in the free trade zone in Dubai, for third country trade of sugar. It has a prominent trading presence and between 2000 and 2005, the Company exported 240,919 MT of sugar representing 8.32% of Indian sugar exports, ranking second in the overall exports of Indian sugar, in terms of quantity.

Financials:
Shree Renuka Sugars has a track record of consistent growth. Over the period FY01 to FY04, the Company’s revenues grew at a CAGR of 42.85% and Profit After Tax at a CAGR of 114.62%.

For the year ended September 30, 2004 (financial year is October – September), the Company recorded a Turnover of Rs.2,455.34 million and its adjusted Profit After Tax stood at Rs.56.50 million.

For the nine month period ended June 30, 2005, the Company’s Turnover grew by 144.94% to Rs.5,184.35 million (Rs.2,116.57 million) and adjusted Profit After Tax grew by 224.31% to Rs.320.55 million (Rs.98.84 million).

Expansion :
Shree Renuka Sugars has embarked on expansion projects at an outlay of Rs.1,285 million to be funded by IPO proceeds and internal accruals.

At Munoli, cane crushing capacity will be expanded from 2500 TCD to 7500 TCD (Rs.635 million) and distillery capacity from 60 KLD to 120 KLD (Rs.150 million).

At Unit III, the company is setting up a 15 MW co-generation power plant (Rs.200 million) and a 120 KLD distillery (Rs.300 million).

All these projects are slated to commence commercial production between October 2006 and December 2006.

FOR FURTHER DETAILS AND RISK FACTORS, KINDLY REFER TO THE RED HERRING PROSPECTUS

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