Grasim Industries To Raise Up To Rs 4,000 Crore Via Rights Issue

Grasim Industries Ltd. will raise up to Rs 4,000 crore through a rights issue, following board approval, to fund an ongoing capital expenditure plan and repay existing debt.

The fundraising will be subject to the receipt of regulatory and statutory approvals, the Aditya Birla Group company said on Monday. The record date will be determined in due course.

The promoters and promoter group will fully subscribe to their rights entitlement and to the unsubscribed portion, if any, the company said.

"The Board or a duly constituted Committee of the Board shall decide all other terms and conditions of the Rights Issue, including but not limited to the issue price, rights entitlement ratio, record date, timing, and terms of payment as may be required from time to time," according to an exchange filing.

"The proposed rights issuance by Grasim aims to fund the ongoing capital expenditure plan, repay existing borrowings, and support general corporate purposes," a separate statement said.

Further, the capital outlay to establish Grasim as India’s second-largest decorative paint player is on track, it said.

Last month, the cement maker unveiled the brand name of its paint business, where it plans to make a major entry.

The market launch of Birla Opus is scheduled for the fourth quarter of the current financial year. Grasim will offer a full suite of high-quality products in the decorative paints segment.

Ahead of the launch, the company has piloted its painting services in key metros and introduced a range of imported wood finishes. It had previously committed an investment of Rs 10,000 crore towards setting up the paints business, which will have a total capacity of 1,332 million litres per year.

Shares of Grasim Industries closed 0.55% lower at Rs 1,972 apiece, ahead of the announcement on Monday, as compared with a 0.17% decline in the benchmark S&P BSE Sensex.