Asian Granito to raise 90 Cr Rs.(900 mln) via preferential warrants

AHMEDABAD | MUMBAI | RAJKOT – Ahmedabad headquartered Asian Granito India Ltd to raise 900 million rupees (90 crore) through preferential warrants issue, offering 5 million (50 lakh) convertible warrants of promoters & non-promoters group, with an intent to use the proceeds to fund high margin products, the company press release submitted to the Indian Stock Exchanges on Wednesday read.

The company has derived price of Rs.180 per share and the company plans to receive the first installment of 25% of issues proceeds pegged at 225 million rupees (22.5 crore), post approval in Extra Ordinary General Meeting.

The 5 million (50 lakh) warrants to be issued to promoter and non promoter group in the equal proportion.

Promoter Group indudes Kamlesh Patel, Mukesh Patel and Suresh Patel with be allotted in total 2.5 million (25 lakh) convertible warrants and whereas balance 2.5 million (25 lakhs) will be allotted to the non-promoter group, the release read.

The warrant holders shall be entitled to convert the warrants into equivalent number of equity shares of face value of Rs.10/- each, on receipt of entire amount in one or more tranches, within a period of 18 months from the date of the allotment.

Commenting on the decision, Kamlesh Patel, Chariman & Managing Director of Asian Granito India Ltd said,

“Our transformation journey is a result of our continuous investments in Technology, R&D (Research & Development), Brand building and Quality enhancement. For the next phase of growth we focus on, Asset light and Capital light business model, becoming strong retail brand in the domestic as well as exports market and achieve leadership position in key business segments.”

The company management is focused to increase sales from high value products such as big slab tiles, Marble and Quartz, the CMD’s quote read.

Proceeds of the warrants issue will be utilized to meet the company’s future roadmap including funding for the company’s expansion plans in Marble & Quartz, Sanitaryware (products) and Nano Quartz Marble, the CMD’s quote emphasized.

On financial restructuing front, the company management wants to use proceeds from issue towards debt reduction, address working capital requirements and further improve capital structure, the release read.

Promoter group holds 32. 73% equity in the company which is expected to increase to around 35% post the warrants conversion, the release claimed.

Institutions including Mutual funds and Foreign Portfolio investors holds 8.16% equity in the company, the statement said.

Commenting on the development, Mukesh Patel, Managing Director, Asian Granito India Ltd, said,

“Company has taken variety of branding initiatives and recalibrated the existing market approach in housing decor industry and the results are fantastic. By capitalising on its high-end products range company is confident of excellent responses from the domestic and export market and expects to grow exports significantly over the next 2 to 3 years.” 

Company has a deep penetrated extensive network, that spans over 6,000+ touch points, including 289+ exclusive AGL Tiles showrooms and 16 Company-owned Display Centres, across India, Mukesh Patel’s quote in the release read.

Asian Granito India Ltd (AGL) has emerged as one of the largest ceramic production companies of India in a short span of 18 years, from manufacturing 2,500 square metres per day in the year 2000, to over 1 lakh square metres currently.

Company offers wide range of products induding, ceramic floor, digital wall, vitrified, parking, porcelain, glazed vitrified, outdoor, natural marble, composite marble & quartz etc.

Investors & Traders reciprocated instantly in a positive manner to the fund-raising announcement made by the company.

The market sentiment was reflected in form of an instant spike in the share price of the company, which continued trading the momentum in green zone, finally ending on positive counters, on Wednesday, as the trading session came to halt on the Indian Bourses.