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Grasim Industries, an Aditya Birla Group company, will raise ₹4,000 crore by issuing 2.21 crore new shares on rights basis. The company has set rights issue price at ₹1,812 a share. The issue price is at 12 per cent discount to the closing price of ₹2,069 on Thursday.
Investors owning 179 shares will get to apply for six rights equity shares, said the company. The record date has been fixed as January 10, said the company in an exchange filing.
The issue will open for subscription between January 17 and 29. Investors can renounce their entitlement on-market till January 23.
The company plans to issue up to 2.2 crore shares to promoters and the promoter group, it said.
It announced that the promoters and the promoter group are committed to fully subscribing to their rights entitlement. Additionally, they express their intention to subscribe to any unsubscribed portion.
Investors have to pay ₹452.50 a share along with the application and subsequent amount of ₹1,359 in three instalments. The exact quantum of amount to be paid and date for paying the amount will fixed by board, said the company.
Board approval
Last October, the company received the board’s approval to raise ₹4,000 crore through a rights issue.
A diversified company with business interest in viscose staple fibre, chemicals, linen yarn and fabrics, it ventured into paints business and is setting up six plants across India.
In the September quarter, Grasim incurred capital expenditure of ₹1,650 crore; of this, ₹1,270 crore was spent on the paints business. Overall, the company has spent about ₹4,900 crore in the paints business.
The fundraising initiative of the company is directed towards supporting its ongoing capital expenditure plan and paying existing debt obligations.
Decorative paints
The company will provide a comprehensive range of premium products in the decorative paints segment. It had initially pledged an investment of ₹10,000 crore to establish the paints business, encompassing a total annual capacity of 1,332 million litres.
During the September quarter, Grasim launched a painting service offering “PaintCraft” across eight major cities and revealed the paint brand name as Birla Opus.
The paints segment is likely to start operations in the current quarter, with the company receiving necessary approvals to operate plants at three locations.
The company launched “Birla Pivot”, its B2B e-commerce platform for building materials, to serve Maharashtra, Madhya Pradesh, and Delhi markets.
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