Shree Renuka Sugars has announced that the company has got approval from the Forward Markets Commission (FMC) to purchase 5% stake in National Commodity and Derivatives Exchange (NCDEX).

However, FMC Chairman B C Khatua informed that the company would have to give up its membership in the NCDEX before purchasing the stake as it cannot remain a shareholder and enjoy trading rights in the same exchange.

The sources informed that the company`s September delivery sugar contract expires on Sep. 19, 2009. The sources further informed that Shree Renuka Sugars has decided to buy 1.5 million shares of NCDEX at Rs 243 a share.

As per reports in media, the last date for the foreign entities to conform to government guidelines on holding of stakes in Indian commodity exchanges is Sep. 30, 2009. The major activity of Shree Renuka Sugars Ltd. is to manufacture and market sugar.

It also provides power generation and ethanol production. The Group operates through four segments: Sugar, Trading, Co-generation and Distillery. During August 2007, the Group established Shree Renuka Biofuels Holdings (FZE).

Shares of the company declined Rs 9.2, or 4.91%, to settle at Rs 178. The total volume of shares traded was 1,276,156 on Bombay Stock Exchange (BSE) (Friday).