India’s Aditya Birla Group-owned Grasim Industries said, on Monday, it will raise up to Rs 4,000 crore through a rights issue of shares at face value of Rs 2 each.
The fund raise comes a month after of the textile-to-chemicals maker announced plans to enter the paint business under the brand name ‘Birla Opus’ in the fourth-quarter of fiscal 2024.
Grasim has also said, in a statement, it will invest 100 billion rupees towards setting up its paints business, as it seeks to challenge the market leader Asian Paints, which controls nearly half the country’s market share in the sector. Initially, the company is aiming to become the second largest paints player in India.
Shares of Grasim have risen 14.5 per cent so far this year, outperforming the bluechip Nifty 50 index, which rose 9 per cent.
”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 Standalone level). The rating agencies continue to reaffirm Grasim’s ‘AAA’ ratings.”, the company said in a press release.
The company plans to use the proceeds to fund the ongoing capital expenditure plan, repay existing borrowings, and support general corporate purposes.
The company also highlighted that its working on their highest ever capital expenditure plan, ”The Company has raised debt to part fund the on-going capital expenditure plan and the funds raised by this issue will also be largely used towards growth capex,” the company added.
The plan is subject to receipt of regulatory/statutory approvals, in accordance with the applicable laws.
It is also a leading global player in Viscose Staple Fiber (VSF) and the largest chemicals player in India.
(With inputs from agencies)
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