Asian Granito files draft letter of offer for rights issue up to Rs500 crore; Stock gains 2%

21 Mar 2022 , 02:33 PM

Asian Granito India Limited (AGL), one of the largest Luxury Surfaces and Bathware Solutions brands in the country, has filed draft papers (Draft Letter of Offer) for Rights Issue of equity shares to raise up to Rs500 crore (USD 70 Mn).

The Company has lined up Mega Expansion Plan in Value Added Luxury Surfaces & Bathware Segments such as GVT Tiles, Sanitaryware and SPC Flooring segments through setting up new state-of-the-art manufacturing facilities at Morbi, Gujarat, under newly incorporated wholly owned subsidiaries.

The Company is also setting up one of the World’s largest Display Centres covering an area of approx. 1.5 lakh sq. feet at Morbi, Gujarat to showcase Group’s entire product range under single roof. The new manufacturing facilities are expected to commence commercial operations in April 2023.

At around 2:37 PM, Asian Granito India was trading at Rs110.30 apiece up by Rs2.3 or 2.13% on Sensex.

Highlights of Key Strategic Initiatives and Milestones achieved in FY22:

• Successfully completed Rights Issue of Rs224.64 crores in the month of October 2021. The issue was oversubscribed by 1.15 times (Issue Size: Rs224.64 crore; Bids Received: Rs258.77 crores). Post this, the Company has become net debt free on a standalone basis.
• ICRA upgrades rating of Asian Granito India Ltd to “A Positive with a Stable Outlook”.
• Exited its non-core investment in Astron Paper Board Mill Ltd with a profit of Rs38 crore to focus on core business.
• Crystal Ceramic Industries Private Limited (subsidiary of AGL) completed a major expansion of 12,000 sq. mtrs. per day Glazed Vitrified Tiles with investment of Rs25 crore at Mehsana, Gujarat in June 2021, taking its total installed capacity to 36,000 sq. mtrs. per day.
• The Company has entered into a manufacturing outsourcing agreement with its associate concern M/s Adicon Ceramica LLP (‘’Adicon”). Adicon will be manufacturing large format GVT Slabs of 1600×3200 mm size using ultra-modern fully automated Italian technology with an installed capacity of 15,000 sq. mtrs. per day. AGL will market the product under the “AGL” Brand.
• In a move to create living and business spaces safer, beautiful and hygienic than ever in Covid era, the Company has launched ‘AGL Tuffguard Anti-Bacterial Tile’ and ‘Touch Free’ range of bathware .

Commenting on the development, Kamlesh Patel, Chairman and Managing Director, Asian Granito India Ltd, said, “Indian Industry has been witnessing significant shift in the recent years from Double Charge Tiles to Value Added Large Format GVT Tiles and Slabs. Although, Double Charge Tiles still holds major share in the overall demand and is well penetrated across the market, however, with new technologies emerging, to manufacture innovative designs through glazing & digital printing, GVT and PGVT are expected to grow at higher rates in medium to long term.

In Sanitaryware, India is 2nd largest manufacturer after China and one of the fastest growing markets globally with immense opportunities led by various micro and macro factors and policy initiatives. Similarly, SPC Flooring is also emerging as the fastest hard flooring product across the globe due to its varied advantages over other hard flooring products including ease of installation, heat & water resistant characteristics, etc.

Currently, AGL has presence in GVT Tiles and Sanitaryware through own manufacturing as well as third party manufacturing. To fuel the Mega Expansion Plan in these segments and various strategic initiatives, the Board has approved issuance of equity shares for up to INR 500 crores via Rights Issue. With commercialisation of the proposed plans as above, AGL is expected to further strengthen its position as an Integrated Luxury Surfaces and Bathware Solutions Brand and up the Group’s margin profile in near to medium term.”