Rights issue of Asian Granito India Limited (AGL), one of the largest Luxury Surfaces and Bathware Solutions brands in the country is open for subscription for its shareholders. The issue opens on April 25 and will close on May 10. Company is raising Rs. 441 crores through the rights issue to fund its Mega Expansion Plans Value Added Luxury Surfaces & Bathware Segments including GVT Tiles, Sanitaryware and SPC Flooring etc. Equity Shares under the Rights Issue are offered at a price of INR 63 per Share i.e. 24% discount to the closing share price of Rs. 82.9 per share on April 22, 2022 on NSE. Trading of the Rights Entitlements allotted to eligible shareholders is available on BSE and NSE between April 25 to May 5 (for online) and till May 10 (offline).
The Company will issue upto 6,99,93,682 fully paid-up Equity Shares of face value of INR 10 each for cash at a price of INR 63 per Equity Share (including a premium of INR 53 per Equity Share) aggregating INR 440.96 crore on a rights basis to eligible equity shareholders in the ratio of 37:30 (37 Equity Shares for every 30 Equity shares fully paid-up Equity Share held by the Eligible Equity Shareholders). Company had fixed April 12, 2022 as record date for the purpose of determining equity shareholders entitled to receive the rights entitlement in the rights issue. Last date for On-market Renunciation of Rights Entitlements is May 5, 2022. Proceeds of the Rights issue will be utilised to set up three new state-of-the-art manufacturing facilities at Morbi, Gujarat in Value Added Luxury Surfaces & Bathware Segments including GVT Tiles, Sanitaryware and SPC Flooring, setting up one of the India’s largest Display Centre, funding the working capital requirements of the above new projects and general corporate purposes.
The Promoter & Promoter Group shareholders have confirmed their participation of up to 28.99% shareholding (i.e. upto 100% of their current shareholding) amounting to Rs. 128 crores. Promoter and Promoter Group shareholders have also indicated that in case the Issue is undersubscribed, they reserve the right to subscribe to part or the whole amount of the unsubscribed portion, subject to applicable laws. Post completion of the Issue, total outstanding shares of the Company would increase to 12,67,45,316 equity shares from 5,67,51,634 equity shares as on March 31, 2022. Pantomath Capital Advisors Pvt. Ltd. is the sole lead managers to the rights issue. Commenting on the development, Mr. Kamlesh Patel, Chairman and Managing Director, Asian Granito India Ltd said, “Morbi is India’s hub for Ceramic Tiles & Sanitaryware and accounts for more than 80% of the country’s total production, housing over 1,100 manufacturing units. AGL has lined up major expansion plans in Morbi region in the state of Gujarat, keeping in mind strategic locational advantages, proximity to the raw material sources, easy & quick availability of manpower, proximity to some of the country’s largest ports, among others. With commercialisation of the proposed plans, AGL is expected to strengthen its position as an Integrated Luxury Surfaces and Bathware Solutions Brand and up the Group’s margin profile in near to medium term.”
New entities incorporated for Expansion:-
• Future Ceramic Pvt Ltd – FCPL (wholly owned subsidiary of AGL) to manufacture Value Added Large Format Glazed Vitrified Tiles (GVT) in 1200×1200 mm, 1200×1800 mm, 1200×2400 mm, 800×1600 mm and 800×2400 mm formats. To capture the vast opportunities in the GVT space, FCPL is setting up a new manufacturing facility at Morbi, Gujarat with an installed capacity of 5.94 million sq. mtrs. per annum. Total estimated cost for setting up the new manufacturing unit in FCPL is around INR 174 crores.
• AGL Sanitaryware Pvt Ltd – ASWPL (wholly owned subsidiary of AGL) plans to establish in-house manufacturing unit of Sanitaryware products. Currently, AGL deals in a range of Sanitaryware products, manufactured through third party manufacturers and imported from outside India, and are marketed under AGL Brand. To strengthen and scale up the Sanitaryware segment, the Group is setting up manufacturing facility at Morbi, with an installed capacity of 0.66 million pieces per annum. Estimated cost for setting up the proposed new unit is around INR 46 crores.
• AGL Surfaces Pvt Ltd – ASFPL (a wholly owned subsidiary of AGL) to manufacture innovative new age Stone Plastic Composite (SPC) flooring. ASFPL is incorporated as part of the Company’s strategy to expand product portfolio and presence in high growth oriented export markets through value added offerings. The manufacturing facility is proposed to be set up at Morbi with an installed capacity of 2.97 million sq. mtrs. of flooring per annum. Total estimated cost for setting up the new manufacturing unit in ASFPL is around INR 33 crores.
The Company has estimated that total working capital requirement for all the New Projects in the first year of commercial operations in 2023-24 will be around INR 80 crores, for which company is planning to utilise around INR 37 crores out of Rights Issue Proceeds. The Company is also setting up one of the World’s largest display centre at India’s Ceramic Tiles hub – Morbi, Gujarat to showcase AGL Group’s entire product range under single roof i.e. Tiles, Sanitaryware, Bathware, Quartz & Engineered Marble, SPC, etc. The five storey display centre is conceptualised in 1.5 lakh square feet of area and aims to showcase AGL Group’s production, technological excellence and best in class sourcing caliber at single place and is also expected to enhance Company’s brand and reach. Total estimated cost for setting up the Display Centre is around INR 40 crores. The Company currently exports to more than 100 countries and planning to expand to 120 plus countries. Company targets to increase its retail touch points to over 10,000, expand exclusive showrooms to over 500. The Net Proceeds of the Rights Issue shall be used for the Proposed Projects. Additionally, the Company also proposes to deploy the proceeds of the Rights Issue to meet general corporate purposes including other strategic initiatives, debt reduction in group, brand building and strengthening, marketing activities, and ongoing general corporate exigencies.