Grasim Industries Limited , a flagship company of the Aditya Birla Group, has reported no deviation in its rights issue fund utilization, announced strategic moves to bolster its renewable energy portfolio, and approved a new stock option grant for employees.

Employee Stock Option Grant

Grasim Industries Limited's Nomination and Remuneration Committee has approved the grant of 2,668 stock options to eligible employees under the Grasim Industries Limited Employee Stock Option and Performance Stock Unit Scheme 2022. The grant comprises:

• 2,407 stock options priced at Rs. 2,882.00 per option (based on market price)
• 261 Performance Stock Units (PSUs) priced at Rs. 2.00 per unit

Key details of the grant include:

• Stock options will vest 33% each over three years starting one year from the grant date
• PSUs will vest 100% after three years
• Stock options can be exercised within five years of vesting
• All options and PSUs are subject to performance conditions
• The scheme is implemented through the Grasim Employees Welfare Trust and complies with SEBI regulations

Rights Issue Fund Utilization

Grasim Industries Limited submitted its monitoring agency report for the quarter ended September 30, showing no variation or deviation in the utilization of funds from its rights issue. CARE Ratings Limited, serving as the monitoring agency, confirmed that the company properly utilized the proceeds from its ₹3,999.80 crore rights issue conducted in January.

Key details of the rights issue include:

• 2,20,73,935 equity shares offered at ₹1,812.00 per share
• Subscription rate of 1.97 times
• Allocation of ₹3,000.00 crore for repayment of borrowings
• ₹977.65 crore allocated for general corporate purposes

During the quarter, funds were utilized for:

• Repayment of commercial paper worth ₹967.26 crore
• Salaries of ₹3.20 crore

An unutilized amount of ₹0.44 crore remains in the monitoring bank account with Axis Bank.

Renewable Energy Expansion

The Board of Directors of Grasim Industries has approved the acquisition of 26% equity stakes in three Special Purpose Vehicles (SPVs) for renewable energy projects. These SPVs are being formed in collaboration with Prozeal Green Energy Limited and GMR Energy Limited. The projects aim to establish captive wind-solar hybrid power generation facilities, each with an approximate capacity of 50MW.

The acquisitions include:

1. Pro-Zeal Green Power Eighteen Private Limited for the Vilayat Plant in Gujarat
2. A to-be-formed SPV with Prozeal Green Energy Limited for the Balabhadrapuram Plant in Andhra Pradesh
3. A to-be-formed SPV with GMR Energy Limited for the Ganjam Plant in Odisha

These strategic investments, involving cash considerations with equity investments up to ₹3.60 crores in tranches, are designed to meet the company's green energy needs and optimize energy costs.

Leadership Change in Paints Division

In a separate development, Rakshit Hargave, CEO of Birla Opus Paints, has resigned from his position to pursue opportunities outside the company. Hargave, who joined Grasim Industries in November 2021, played a crucial role in the startup phase of the Decorative Paints business and its initial scaling up.

During his tenure, Hargave contributed significantly to:

• Establishing six integrated manufacturing facilities
• Scaling distribution and supply chain networks nationwide
• Building a high-performing team

The Board of Directors has accepted Hargave's resignation, effective from the close of business hours on 5th December. In the interim, Himanshu Kapania, Managing Director of Grasim Industries, will directly oversee the Paints business until a successor is announced.

Company's Performance

For the quarter ended September 30, Grasim Industries reported a loss of ₹118.18 crore on a standalone basis. However, the company's diversified portfolio, spanning Cellulosic Fibres, Chemicals, Building Materials, and Financial Services, continues to drive growth.

Grasim Industries Limited , a flagship company of the Aditya Birla Group, has announced plans to acquire a 26% equity stake in three Special Purpose Vehicles (SPVs) for renewable energy projects. The move is aimed at powering the company's captive green energy requirements for its plants located in Gujarat, Andhra Pradesh, and Odisha.

Investment Details

The total investment for these acquisitions amounts to ₹69.00 crore, to be made in one or more tranches. The breakdown of the investment is as follows:

Project Specifics

• The SPV for the Vilayat plant in Gujarat, named Pro-Zeal Green Power Eighteen Private Limited, has already been formed.
• SPVs for the Balabhadrapuram plant in Andhra Pradesh and the Ganjam plant in Odisha are yet to be incorporated.
• All three SPVs will be engaged in the generation and transmission of renewable energy.

Strategic Rationale

Grasim Industries stated that the objectives of these acquisitions are to:

1. Meet the green energy needs of its plants
2. Optimize energy costs
3. Comply with regulatory requirements for captive power consumption under electricity laws

Execution Timeline

The company expects to complete the acquisitions within 30 days from the execution of Share Purchase and Shareholders Agreement(s).

Industry Context

This move aligns with the growing trend of large industrial companies investing in renewable energy sources to meet their power needs while also fulfilling sustainability commitments. It reflects Grasim Industries' efforts to transition towards greener energy solutions and reduce its carbon footprint.

The investment in these SPVs demonstrates Grasim's commitment to sustainable practices and its strategy to secure long-term, cost-effective, and environmentally friendly power sources for its manufacturing operations.