MUMBAI, NEW DELHI : Aditya Birla Group flagship Grasim Industries Ltd on Monday said its board has approved raising ₹4,000 crore through a rights issue. The capital will be used to finance capital expenditure, repay debt and for general corporate purposes. “The capital outlay for the company to establish itself as India’s second largest decorative paints player is on track.
Furthermore, the company is committed to sustaining market leadership in its core businesses viscose and chemicals (at a standalone level)," Grasim said in a statement. The issue price, rights entitlement ratio, timing, record date, and the terms of payment will be decided by the board or a board-appointed committee. The rights issue will be open to all shareholders, with the promoters and promoter group confirming their participation.
The promoters own 42.8% of Grasim. “They will subscribe to their rights entitlement fully and also to the unsubscribed portion, if any, demonstrating their deep conviction in Grasim’s growth prospects," the statement added. Grasim has already committed to invest ₹10,000 crore to set up the paints business, with a cutting-edge research and development facility in Maharashtra.
The company will launch its new paints venture under the Birla Opus brand in the fourth quarter of FY24. “Our foray into decorative paints is a strategic choice that enables us to tap a high-growth market and expand our presence in the vibrant Indian consumer landscape," Kumar Mangalam Birla, chairman of Aditya Birla Group, said last month. According to a JP Morgan report dated 10 August, Grasim Industries also offers attractive volume growth opportunities in its viscose staple fibre (VSF) and chemicals businesses, which operate in a strong
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