Grasim Industries rights issue price fixed at Rs 1,812 per share

Grasim Industries on Thursday announced its plan to do a rights issue of 2.2 crore shares worth Rs 3,999.80 crore. The company has priced its issue at Rs 1,812 per share, a 12 per cent discount to its current market price of Rs 2,068.6.

In an exchange filing, the company said a meeting of its board of directors on Thursday had approved the terms of its rights issue. The company has set January 10, 2024, as the record date for its rights issue. The issue will open on January 17, 2024, and conclude on January 29, 2024.

The company has decided on a rights entitlement ratio of six shares for every 179 fully paid-up equity shares held by the eligible equity shareholders as of the record date.

Jefferies, JM Financial, SBI Capital Markets, Kotak Investment Banking, and Bank of America (BofA) are the bankers on the issue.

Grasim's rights issue, if successful, will be the tenth-highest rights issue in the history of the Indian equities market. Some of the large rights issues in the last five years include that of Reliance Industries (Rs 53,124 crore), Bharti Airtel's rights issues in 2019 worth Rs 25,000 crore and in 2021 worth Rs 20,999 crore.

The rights issue is a fundraising mechanism for listed firms to raise money by offering existing shareholders new equity shares. The new shares are typically discounted at the prevailing market price to incentivise investors to subscribe. If an existing investor doesn't intend to participate in the rights offering, there is an option to renounce the shares in favour of others. In 2023, 11 companies raised Rs 7,168 crore through rights issues.