World Bank Group member International Finance Corporation (IFC) has invested $150 million (Rs 1,250 crore) in Grasim Industries Limited, a flagship company of the Aditya Birla Group, according to an announcement on Thursday.
The investment, which is in the form of subscription to non-convertible debentures (NCDs) issued by Grasim Industries, will be utilised to finance the company’s ongoing capital expenditure programme for the paints business and working capital needs, IFC said in its disclosure.
Grasim is investing approximately $1.2 billion across six new paint manufacturing plants in India, which will be implemented in a phased manner till FY25. These units will come up in Ludhiana (Punjab), Panipat (Haryana), Cheyyar (Tamil Nadu), Chamarajnagar (Karnataka), Mahad (Maharashtra), and Kharagpur (West Bengal).
While IFC has contributed up to $150 million to the project, the balance would be funded through equity raises and internal accruals.
IFC’s investment will accelerate Grasim’s decarbonisation drive through the increased adoption of renewable energy and water recycling in the paint manufacturing process, it said in the disclosure.
Incorporated in 1947, Grasim started as a textile manufacturer in India. Today, it has evolved into a diversified player with a presence across many sectors. It is a leading global producer of viscose, diversified chemicals, linen yarn and fabrics producer.
The company entered the paints business under the brand name ‘Birla Opus’ only recently, and is aiming for Rs 10,000 crore gross revenue within three years of full-scale operations.
“We are addressing the transition to a low-carbon economy through our renewable projects and energy-efficient products, and are looking forward to further aligning our activities to the global sustainable development goals,” said H K Agarwal, Managing Director, Grasim Industries.
Aditya Birla group chairman Kumar Mangalam Birla and his family hold around 43% in Grasim Industries, while the balance is held by institutional investors and other public shareholders. The company reported consolidated net revenue of Rs1,17,627 crore and EBITDA of Rs20,478 crore in the financial year ended March 2023.