Asian Granito India’s INR 224.65 crore Rights Issue to open on September 23

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Rights Issue priced at Rs. 100 per share – 40% discount to current market price; Rights Issue opens Sep 23 and closes on October 7.

Highlights:

• Funds raised through the issue will be used to repay/prepay borrowings, meeting working capital requirements for the company’s business activities and general corporate purposes
• The rights entitlement ratio for the proposed rights issue is 19:29; 19 rights equity shares of INR 10 each for every 29 equity shares of INR 10 each held by the equity shareholders
• Promoter Group shareholders, have confirmed their participation of up to INR 58.68 crore
• Company fixes September 9, 2021 as record date for the purpose of determining the equity shareholders entitled to receive the rights entitlement in the rights issue
• Post Rights issue total outstanding shares to increase to 5.67 crore from 3.42 crores share

Asian Granito India Limited (AGIL), manufacturer of one of India’s leading tiles brand is scheduled to open its Rights Issue on September 23, 2021. The funds raised through the Issue will be used to repay/prepay certain outstanding borrowings, meeting working capital requirements for the company’s business activities and for general corporate purposes. Right issues are offered at a price of INR 100 per Share – 40% discount to current share price of INR 166 per share on September 3. Rights Issue closes on October 7, 2021.

The Company will issue 2,24,64,188 fully paid-up Equity Shares of face value of INR 10 each for cash at a price of INR 100 per Equity Share (including a premium of INR 90 per Equity Share) aggregating to INR 224.65 crore on a rights basis to eligible equity shareholders in the ratio of 19:29 (19 Equity Shares for every 29 Equity shares fully paid-up Equity Share held by the Eligible Equity Shareholders of the Company, as on the record date).

Kamlesh Patel, Chairman and Managing Director, Asian Granito India Ltd. said “Company has taken many important initiatives in the recent past with a focus to reduce debt, strengthen the core business of tiles and building materials with an aim to moving towards asset light and capital light business model. Proceeds of the issue will further strengthen the company’s balance sheet, reduce debt and help fund its strategic growth initiatives. With all these measures, the company may become debt free on a standalone basis in the current financial year itself.”

The Promoter & Promoter Group shareholders, have confirmed their participation of up to INR 58.68 crore. Certain Promoter and Promoter group shareholders have also indicated that, in case the rights issue is undersubscribed, they reserve the right to subscribe to part or the whole amount of the unsubscribed portion, subject to applicable laws. Post the rights issue, total outstanding shares of the company should increase to 5,67,51,634 equity shares from 3,42,87,446 equity shares as on June 2021. Lead Managers to the rights issue are Holani Consultants Private Ltd and BOI Merchant Bankers Ltd.

The company plans to become debt free in the next 2-3 years on a consolidated basis. The company has reduced its overall consolidated debt by about Rs 35 crores, resulting in debt equity ratio improving to less than 0.5 times. In August 2021 company divested its entire 18.87% stake in its associated company – Astron Paper and Board Mills Ltd (Astron Paper) for INR 46.94 crore to focus on core business of tiles and building materials. Proceeds from the sale of Astron Paper shares to be utilized to meet long term working capital and business development of Asian Granito India Ltd.

For FY 21, the Company reported a net profit of INR 57.23 crores on consolidated basis – growth of 36% Y-o-Y. Net sales for FY 21 was reported at Rs. 1,292 crores with 6% growth Y-o-Y and EBITDA was reported at INR 135.95 crore with 16% growth Y-o-Y. EBITDA Margin improved 91 basis points to 10.5% in FY 21 while Net profit margin improved by 100 basis points to 4.4%.

Company currently exports to more than 100 countries and plans to expand to 120 plus countries. Company targets to increase its retail touch points to over 10,000, expand exclusive showrooms to over 500.