Grasim Industries gets board approval to raise funds up to ₹4,000 crore via rights issue

The fund raising plan received green signal from the board of Grasim Industries Limited on Monday. The approval was given to raise funds not exceeding ₹4,000 crore by way of a rights issue to the eligible equity shareholders as on the record date.

Also Read: Grasim Industries share price hits fresh 52-week high; is the stock buy-worthy?

“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 shares closed 0.55% lower at ₹1972 per share on BSE on Monday. Its shares touched their 52-week high mark of ₹2,021.95 per share on BSE on October 12.

Also Read: Grasim’s focus on paint, B2B e-com: Birla

The company aims to utilise the fund generated from rights issue in executing its capital expenditure plan, repay existing borrowings, and support general corporate purposes. 

The rights issue is an invitation to existing shareholders to buy additional shares in the company. The company expressed its intentions to complete the said issue to raise funds at the earliest, provided the market conditions and other factors, including the receipt of any regulatory approvals.

Grasim’s highest-ever expenditure plan

Grasim industries is on its path to make its largest-ever capital expenditure. Last year, the company made one of its biggest-ever capital expenditure of ₹4,307 crore, including ₹1,979 crore in the paints business. The company is planning something similar in the current financial year as well. 

Till now, the company has raised debt to part fund the on-going capital expenditure plan and the funds raised by this issue will also be diverted in capex funding. The company is striving to become India’s second largest decorative paints player in the near future along with maintaining its dominance in the its core businesses Viscose and Chemicals (at Standalone level). 

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Updated: 16 Oct 2023, 07:44 PM IST