Grasim Industries Announces ₹4,000 Cr Rights Issue

Grasim Industries Ltd has announced a rights issue at ₹1,812 per share record date is scheduled for 10 January. Approved by the board on 16 October 2023, the rights issue aims to raise ₹4,000 crore by issuing 2,20,73,935 equity shares. Unitholders get 6 rights shares for every 179 fully paid-up equity shares they own as of the record date.

Rights Issue Details

Grasim Industries is set to conduct a rights issue from 17 January to 29 January offering shares at ₹1,812 each which is a 12.47% discount to the current market price. The company intends to generate ₹4,000 crore through the issuance of up to 2.2 crore shares to both promoters and the promoter group. Raised fund will be used for ongoing capital expenditures and to repay existing debt.

Grasim Industries' promoters are fully committed to subscribing to their rights entitlement even covering any unsubscribed portion. The company invested ₹16.5 billion in expansion with ₹12.7 billion directed to the paints business. Total spending on paints has reached ₹49 billion and operations are set to start this quarter.

In the recent quarter Grasim Industries expanded its reach by introducing "PaintCraft," a painting service available in eight major cities. Alongside this also launched "Birla Pivot," a business-to-business (B2B) e-commerce platform specializing in building materials with a focus on the markets of Maharashtra, Madhya Pradesh, and Delhi. These moves showcase Grasim's commitment to diversifying its services and exploring new business avenues.

Grasim Stock Performance

Grasim Industries' stock trading at ₹2,073.00 a slight 0.11% up after the recent announcement. Since the board's approval on 16 October the stock has gained almost 5%. Despite a marginal decrease in the last month the company has shown strong overall performance with a 16.04% increase in the past 6 months 21.47% rise in the past year, and 154.37% over the last 5 years.

Grasim Industries reported 17.6% YoY decline in Q2 net profit totaling ₹794.7 crore compared to ₹964.3 crore in the same period last year. The company's revenue from operations also fell by 4.5% to ₹6,442 crore from ₹6,745.2 crore in the same period last year.