Grasim to raise Rs 4k crore through rights issue

MUMBAI: Aditya Birla Group flagship company, Grasim Industries, will raise Rs 4,000 crore by way of a rights issue of equity shares of face value of Rs 2 each, to fund its ongoing capital expenditure plan, repay existing borrowings, and support general corporate purposes.
In a statement, Grasim Industries said its board approved the raising of funds not exceeding Rs 4,000 crore by way of a rights issue to the eligible equity shareholders as on Monday.
A rights issue is an issue of shares at a special price by a company to its existing shareholders in proportion to their holdings. The Kumar Mangalam Birla-led company said the promoters and promoter group have confirmed their participation. "They will fully subscribe to their rights entitlement and also to the unsubscribed portion, if any, demonstrating their deep conviction in Grasim's growth prospects," it said.
The promoters and promoter groups have a shareholding of 42.9% in the company as on June 30, 2023. Grasim, which is a leading global producer of viscose, diversified chemicals, linen yarn and fabrics, has raised debt to partly fund the ongoing capital expenditure plan and the funds raised by this issue will also be largely used towards growth capex.
The company, which recently entered the paints business and is setting up six plants across India, said the capital outlay "for the company to establish itself as India's second largest decorative paints player" is on track.
The company reported consolidated net revenue of Rs 1,17,627 crore in FY23.