Sunday, July 21, 2024

Grasim gets ₹5,000 crore credit line from Axis Bank

MUMBAI: Aditya Birla Group-owned flagship Grasim Industries Ltd., on Tuesday, availed a Rs. 5,000 crore credit line from Axis Bank Ltd. for capital expenditure and repayment of some of its existing loans.

In an exchange filing, Grasim Industries said it has entered into three term loan agreements with Axis Bank totalling 5,000 crore.

One of the term loans, valued at 4,850 crore, will be utilised for fresh capital expenditure and for the reimbursement of capital expenditure that has already been incurred within the past year, said the company.

The other two term loans worth a total of 150 crore will be unsecured and designated for specific projects, according to the exchange filing.

Grasim Industries, which is primarily known for textile manufacturing, is a global producer of viscose staple fibre, the largest chloralkali, linen and insulators player in India.

Grasim is also the country’s largest cement producer and diversified financial services (NBFC, asset management and life insurance) firm in India through its subsidiaries UltraTech Cement and Aditya Birla Capital.

Even though Grasim did not specify its capex plan in Tuesday’s filing, earlier it had announced spending around 10,000 crore on the group’s ambitious new venture in the paints business. The group is in the process of setting up six manufacturing facilities for a pan-India distribution network. Grasim is likely to announce a commercial launch of the paints business in the ongoing fiscal.

During the April-December period of 2023, Grasim has spent about 1,800 crore on the paints business capex plan.

Also, Grasim is expanding capacities in viscose staple fibre and chemicals, while epoxy capacity will be doubled to 246 kilotonnes per annum by 2023-24.  Epoxy is the family of basic components or cured end products of epoxy resins. The primary areas for application of epoxy resins in construction projects are coatings, flooring, concrete restoration, crack repair, and as joint material for tiles.

Of the total budgeted capex of 3,500 crore in FY2023, the company has spent close to 1,400 crore in the first three quarters.

On 24 March 2023, Grasim Industries made an acquisition of 220 acres of land in Gujarat Industrial Development Corporation from Century Textiles and Industries Ltd for 254.70 crore, which includes a GST of 38.85 crore.

Grasim Industries’ shares closed 0.29% down at 1,627.95 per share on the NSE on Monday.

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