Grasim Industries’ board approves debt plans, shares fall

The issuance of non-convertible debentures (NCD) on a private placement basis, totaling a maximum of Rs 2,000 crore, in one or multiple installments, was approved by the Board of Directors of Grasim Industries.

This isn’t the first time the company has raised money through NCD. In December last year, it raised Rs 1,000 crore at a 7.6 percent coupon.

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Non-convertible debentures cannot be converted into equity shares of the company and are instead redeemed at the end of a predetermined period. In essence, NCDs are debt instruments issued by a company to acknowledge its responsibility to repay the principal amount along with a specified interest rate.

Started as a textile manufacturer in the country, Grasim has forayed into varied businesses such as viscose, diversified chemicals, linen yarn and fabrics producer in India. The company has recently entered the paint business.

For its paints segment, the company is planning to set up six manufacturing plants in Haryana, Punjab, Karnataka, Tamil Nadu, Maharashtra, and West Bengal till FY 2025 with a total capacity of 1,332 MLPA and a project cost of Rs 10,000 Crore, according to Grasim’s website.

Furthermore, the company has received environmental clearance for five sites out of six. The R&D centre has been established and is fully functional. Once underway, it will compete with the likes of Asain Paints, the biggest player in the country.

Grasim Industries Ltd, the leading company of the Aditya Birla Group, announced a significant decline in net profit to Rs 94 crore, down 88 percent in the fourth quarter ending on March 31, 2023. It attributed the decline to tax write-backs and other exceptional items impacting the financial results for the quarter.

During the March quarter, Grasim Industries Ltd recorded a total revenue of Rs 6,645.8 crore, reflecting a 4.2 percent increase compared to Rs 6,376 crore in the corresponding period of the previous fiscal year.

At 11:17 am, the stock was quoting at Rs 1,704, down 0.7 percent from the previous day’s close on the National Stock Exchange. In the last six months, the stock has marginally gained 1.6 percent.

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