Grasim Raises Rs 150 Crore At 13.5%

Grasim Industries, the Aditya Birla group conglomerate, has completed a Rs 150 crore domestic bond issue at a competitive rate of 13.5 per cent for a five-year period.

Orginally sized at Rs 100 crore with a greenshoe option of Rs 50 crore, the issue was fully subscribed when it closed late yesterday. ANZ Grindlays are the managers to issue along with the State Bank of India, DSP-Merrill Lynch and Birla Global Finance. The issue proceeds are expected to fund the capital expenditure of the company.

The latest issue follows a similar trend of borrowings during the last one year. Grasim raised Rs 50 crore at 14.75 per cent in May-June last year. In September they followed it up with another Rs 50 crore transaction at 14.5 per cent. In October they raised Rs 200 crore at 12.25 per cent, and now Rs 150 crore at 13.5 per cent. Despite a drop in net profit from Rs 275 crore in 1996-97 to Rs 231 crore in 1997-98 the company has managed to price the debt issue virtually at PLR currently between 12.5-13.5 per cent.

"In spite of bad market conditions we have managed to place the issue successfully," said Naval Bir Kumar, head (capital markets), ANZ Grindlays. Grasim is expanding its sponge iron plant capacity from 0.7 million tonnes to 0.9 million tonnes this year.