Grasim’s Rights Issue: A Golden Opportunity to Invest at a 12% Discount Amidst Recent Share Price Decline

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Grasim Industries, the flagship company of the Aditya Birla Group, is set to launch a rights issue, providing investors with a unique opportunity to invest at a substantial discount of 12%. This discounted ratio has been fixed for the Rights Issue, which aims to raise Rs 4,000 crore for the company’s capital expenditure and debt repayment plans.

Grasim‘s Rights Issue Overview

Grasim Industries, listed on BSE with a marginal 0.10% fall, plans to issue 2,20,73,935 rights equity shares. The fixed share price for this issue, approved in October last year, is Rs 1812, reflecting a discount of over 12% from the current market price of Rs 2068.60.

Grasim's Rights Issue Overview

Rights Issue Details: When and What Ratio?

The rights issue is scheduled to open on January 17 and close on January 29. Grasim has fixed the rights issue ratio at 6 shares for every 179 shares held. The record date for eligibility is January 10.

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Investors participating in the rights issue need to submit Rs 453 for partly paid shares along with the application, with the remaining Rs 1359 due by March 2026.

Grasim’s Recent Performance and Returns

Grasim shares have demonstrated strength in returns, reaching a record high of Rs 2,175.55 on January 1, 2024, from a one-year low of Rs 1,528.00 on March 16, 2023. Despite a 3% weekly and 5% monthly decline, the company’s shares closed at Rs 2070 on Thursday.

Understanding Rights Issues and Investor Considerations

Rights shares, issued at a discount to the current market price, provide existing shareholders an opportunity to purchase additional shares in proportion to their current holdings. Grasim’s rights issue aims to enhance the company’s capital and is a strategy often employed to raise funds.

Investors holding shares before January 10, 2024, are eligible for the rights issue, presenting an attractive opportunity to acquire additional shares at a reduced cost. Grasim Industries, with its solid track record, continues to explore avenues for strategic financial growth.

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