The board of Grasim Industries Limited yesterday approved the raising of funds not exceeding Rs. 4,000 crore by way of a rights issue to the eligible equity shareholders as on the record date. The proposed rights issuance by Grasim aims to fund the ongoing capital expenditure plan, repay existing borrowings, and support general corporate purposes.

In its transformational growth journey, Grasim is implementing its 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 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 rights issue enables existing shareholders to participate in Grasim’s growth journey. 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.

The Board or a duly constituted Committee of the Board would decide the terms and conditions of the Rights Issue and will be subject to applicable laws and regulatory/statutory approvals as may be required. The Company intends to complete the said issue at the earliest, subject to market conditions and other factors, including the receipt of any regulatory approvals.