Grasim Industries Announces Rights Issue Price Set at Rs 1812 per Share

Grasim Industries, the flagship company of the Aditya Birla Group, has set the price for its rights issue, approved in October 2023, at Rs 1,812 per equity share. The company aims to raise approximately Rs 4,000 crore to support ongoing capital expenditures and repay existing borrowings.

About the rights issue

As per the details provided in the press release, the total number of rights equity shares and the Rights Issue size is 2,20,73,935 equity shares of the company, each on a partly paid basis (“Rights Equity Shares”), amounting to Rs 3,999.80 crore while the Rights Issue price stands at Rs 1,812 per Rights Equity Share when fully paid-up, which includes a premium of Rs 1,810 per Rights Equity Share.

Upon application, a shareholder is required to remit Rs 453 for a partly paid share. The remaining amount must be paid in three subsequent instalments, to be determined by the company, before March 2026.

The fixed rights issue price represents a discount of 12.4% when compared to the previous day’s closing price of Rs 2068.60 per share on the BSE.

The record date to determine the shareholders entitled to the rights issue is January 10, 2024. The issue is scheduled to commence on January 17, 2024, that is Wednesday, and conclude on January 29, 2024, that is Monday, as per the official filing.

The rights entitlement ratio is set at 6 Rights Equity Shares for every 179 fully paid-up equity shares owned by eligible equity shareholders of the Company as of the record date (‘Eligible Equity Shareholders’).

Before the rights issue, the company had a total of 65,85,39,071 equity shares outstanding. Following the completion of the rights issue and assuming full subscription and payment of call monies, the total outstanding equity shares will increase to 68,06,13,006.

The company has announced the commitment of the promoters and the promoter group to fully subscribe to their rights entitlement. Furthermore, they have expressed their intention to subscribe to any unsubscribed portion.

Stock Performance 

At the start of the day’s trading session, the stock opened at Rs 2,098.60 per share, indicating an approximate 1.46% increase compared to the previous day’s closing figure of Rs 2,068.60 per share on the BSE. As of the time of writing this article, the shares are currently at Rs 2,073.20 per share on the BSE. Its 52-week high and low prices are Rs 2,175.55 and Rs 1,528, respectively.

The company’s current market capitalisation stands at Rs 1,36,397.67 crore, and the stock has generated a return of 22% during the past one year and around 116% return in the past three years.

About the company 

Grasim Industries Limited is an India-based global producer of viscose, diversified chemicals, linen yarn, and fabrics in India. The company is segmented into Viscose, Chemicals, Cement, Financial Services, and Others. The Viscose segment comprises viscose staple fibre, wood pulp, and viscose filament yarn. In the Chemicals segment, the company deals with caustic soda, allied chemicals, and epoxy. The Cement segment involves grey cement, white cement, and related products. Under the Financial Services segment, the company offers non-bank financial services, life insurance services, asset management (AMC), housing finance, equity broking, wealth management, general insurance advisory, and health insurance.

The Others segment encompasses textiles, insulators, paints, solar power, and business-to-business e-commerce. Additionally, through its subsidiaries, UltraTech Cement Limited and Aditya Birla Capital Limited, the company operates as a cement producer and a diversified financial services entity.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.