Grasim Industries has chosen five investment banks as advisors for its proposed rights issue to raise up to Rs 4,000 crore, multiple industry sources with knowledge of the matter told Moneycontrol.
The flagship company of the $60 billion Aditya Birla Group looks to implement its highest ever capital expenditure plan.
"The firm has picked Axis Capital, Kotak Mahindra Capital, Jefferies and BofA Securities and SBI Capital for the rights issue," said one of the individuals mentioned above.
The bankers' syndicate was corroborated by two other individuals, who also mentioned that the deal might close before the end of the fiscal year, depending on market conditions.
Under the condition of anonymity, the three individuals mentioned above spoke with Moneycontrol.
A rights issue or offering is an invitation to existing shareholders to purchase additional new shares in the company.
Grasim, which happens to be a leading manufacturer of viscose, diverse chemicals, linen yarn, and fabrics, stated on 16 October that its board has approved funding of up to Rs 4,000 crores through a rights issue.
The company's stock has increased by 8.5 percent during the past six months, giving it a market value of 1.24 lakh crores.
Grasim's stock exchange disclosure added, "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."
The promoter category holds a 42.75 percent stake, according to latest data from the exchanges.
The Grasim board or an appointed committee will decide all other terms and conditions of the rights Issue, including but not limited to the issue price, rights entitlement ratio, record date, timing, terms of payment as may be required from time to time.