Grasim Industries board of directors have given its approval to raise up Rs 4,000 crore via rights issue, Aditya Birla subsidiary company said in an exchange filing. Approval has been granted to raise funds up to a maximum of Rs 4,000 crore through a rights issue available to eligible equity shareholders as of the record date.
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“The board of Grasim Industries Limited today approved the raising of funds not exceeding ₹4,000 crore by way of a rights issue to the eligible equity shareholders as on the record date," the company said in its stock exchange filing.
The company's objective is to deploy the funds raised through the rights issue for three key purposes: executing its capital expenditure plan, repaying current borrowings, and bolstering general corporate operations.
The rights issue represents an opportunity extended to current shareholders, inviting them to acquire additional company shares. The company has affirmed its commitment to expedite this issue to secure funding at the earliest feasible time, contingent upon favorable market conditions and other factors, including obtaining any required regulatory approvals.
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Grasim Industries is embarking on its most extensive capital expenditure to date. In the previous year, the company executed one of its most significant capital outlays, amounting to Rs 4,307 crore, with Rs 1,979 crore allocated to the paints business. The company is set to undertake a comparable initiative in the current fiscal year.
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Uptill now, the company has utilized debt to partially finance its ongoing capital expenditure plan. The proceeds from this offering will also be allocated to support capital expenditure. The company is actively working toward achieving the status of India's second-largest decorative paints player in the near future, all the while retaining its dominant position in its core businesses, namely Viscose and Chemicals (on a standalone level).