Tiles maker, Asian Granito India (AGIL) fixed the price for its upcoming rights issue at ₹100 per share, at about 40 per cent discount to the closing price of ₹166 as on September 3, 2021.

Asian Granito will issue 2,24,64,188 fully paid-up equity shares of face value of ₹10 each for cash at a price of ₹100 per equity share aggregating to ₹224.65 crore on a rights basis. The decision came after the company’s board of Directors met on Saturday.

The shares will be issued to the eligible equity shareholders in the ratio of 19:29 (19 shares for every 29 fully paid-up equity share held by the eligible equity shareholders of the company, as on the record date).

The Promoter & Promoter Group shareholders, have confirmed their participation of up to ₹58.68 crore.

The rights issue opens on September 23, 2021 and closes on October 7, 2021.

The firm has fixed September 9, 2021 as record date for the rights issue.

Post this, total outstanding shares of the company should increase to 5,67,51,634 equity shares from 3,42,87,446 equity shares as on June 2021, a company statement said on Monday.

Fund usage

The funds raised through the issue will be used to repay/prepay certain outstanding borrowings, meeting working capital requirements for the company’s business activities and for general corporate purposes.

Kamlesh Patel, Chairman and Managing Director, Asian Granito India said, “Proceeds of the issue will further strengthen the company’s balance sheet, reduce debt and help fund its strategic growth initiatives. With all these measures, the company may become debt-free on a standalone basis in the current financial year itself.”

In the event of undersubscription, a section of promoters reserve the right to subscribe to part or the whole amount of the unsubscribed portion, subject to applicable laws, the statement said.

Lead managers to the rights issue are Holani Consultants and BOI Merchant Bankers.

Asian Granito plans to become debt free in the next 2-3 years on a consolidated basis. The company has reduced its overall consolidated debt by about ₹35 crore, resulting in debt-to-equity ratio improving to less than 0.5 times.

Company shares traded at ₹160.70 on the BSE during Monday trades.