Grasim Industries To Raise Rs 4,000 Crore Through Rights Issue To Fund Its Growth

Grasim Industries on Monday said it will raise Rs 4,000 crore through a rights issue to fund its next phase of growth.

The company's board, at its meeting on Monday, "approved the raising of funds by way of issue of equity shares of face value of Rs 2 each through rights issue for an amount not exceeding Rs 4,000 crore", it said in a regulatory filing.

"In its transformational growth journey, Grasim is implementing its highest-ever capital expenditure plan," said Grasim in a statement.

The rights issue enables existing shareholders to participate in Grasim’s growth journey, it said.

"The promoters and promoter group have confirmed their participation. They will fully subscribe to their rights entitlement and also to the unsubscribed portion, if any, demonstrating their deep conviction in Grasim's growth prospects," it added.

The board or a duly constituted committee of the board would decide the terms and conditions of the rights issue and will be subject to applicable laws and regulatory/statutory approvals as may be required.

"The company intends to complete the said issue at the earliest, subject to market conditions and other factors, including the receipt of any regulatory approvals," it said.

On October 11, the Aditya Birla group's flagship firm said its board would meet on October 16 to consider raising funds by way of equity shares or other securities through rights issues, qualified institutions placement and preferential issues.

Among others, Grasim Industries is entering into the paints business through the brand 'Birla Opus' where it is investing Rs 10,000 crore to set up greenfield capacities.

It is also a leading global player in Viscose Staple Fiber (VSF) and the largest chemicals player in India.

"The company has raised debt to part fund the ongoing capital expenditure plan and the funds raised by this issue will also be largely used towards growth capex. The capital outlay for the company to establish itself as India's second largest decorative paints player is on track," it said.

For the financial year ended on March 31, 2023, Grasim's consolidated revenues from operations were at Rs 1.17 lakh crore.