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Asian Granito India Ltd (AGL)has filed draft papers for rights issue to raise up to ₹500 crore, the company announced on Monday.
The company has lined up expansion plan in value-added luxury surfaces and bathware segments such as GVT tiles, sanitaryware and SPC flooring segments by setting up new manufacturing facilities at Morbi, Gujarat, under newly-incorporated, wholly-owned subsidiaries, it said in an official release.
It will also be setting up display centres covering approximately 1.5 lakh sq ft at Morbi for ₹40 crore to showcase the group’s entire product range under a single roof.
The new manufacturing facilities are expected to commence commercial operations from April 2023.
Industry trends
Kamlesh Patel, Chairman and Managing Director, Asian Granito India Ltd, said, “The Indian industry has witnessed significant shift in the recent years from double charge tiles to value-added large format GVT tiles and slabs... Although, double charge tiles still holds major share in the overall demand, GVT and PGVT are expected to grow at higher rates in medium to long-term.”
Currently, AGL has presence in GVT Tiles and sanitaryware through own manufacturing as well as third-party manufacturing.
AGL subsidiaries
AGL will incorporate three new entities – Future Ceramic Pvt Ltd (FCPL), AGL Sanitaryware Pvt Ltd and AGL Surfaces Private Ltd.
The total estimated cost for setting up the new manufacturing unit of FCPL is around ₹175 crore with an installed capacity of 6.6 million sq m per annum.
To strengthen and scale up the sanitaryware segment, the group is setting up manufacturing facility with an installed capacity of 0.66 million pieces per annum with an estimated cost of ₹50 crore.
AGL Surfaces Pvt Ltd will set up manufacturing facility with an installed capacity of 2.97 million sq m of flooring per annum at around ₹35 crore.
Rights issue proceeds
The net proceeds of the rights issue would be used for the proposed expansion of projects. The company also proposes to use the funds for meet general corporate purposes including other strategic initiatives, brand building and marketing activities.
Merchant banker Pantomath Capital Advisors Pvt Ltd, which has a specialised division for the construction materials industry, has been roped in. The company’s stock closed over 3 per cent higher at ₹111.65 on the BSE on Monday.
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