Asian Granito Rights Issue: Sanitaryware major announces Rs 500-crore for expansion

Sanitaryware major Asian Granito on Monday announced a Rs 500-crore rights issue to fund its expansion plans.

The proceeds from the Rs 500-crore rights issue will fund the expansion, it added. Pic: https://www.aglasiangranito.com/

Sanitaryware major Asian Granito on Monday announced a Rs 500-crore rights issue to fund its expansion plans.

Under this expansion, the company plans to set up three manufacturing units at an investment of around Rs 300 crore in luxury surfaces and bathware segments.

The proceeds from the Rs 500-crore rights issue will fund the expansion, it added.

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The new plants will manufacture value-added luxury surfaces and bathware segments for large format GVT tiles, sanitaryware and new age stone plastic composite flooring, the Ahmedabad-headquartered company said in a statement.

These plants will come up at Morbi in Gujarat, and are expected to commence commercial operations from April 2023. Morbi is the country's hub for ceramic tiles and sanitaryware, accounting for more than 80 per cent of total production, housing over 1,100 manufacturing units.

Kamlesh Patel, the chairman and managing director of Asian Granito, said India is the second largest sanitaryware manufacturer after China, and one of the fastest growing markets globally. Currently, it 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 up to Rs 500 crore rights issue.

Patel further said the new plants will be operated as separate fully-owned subsidiaries.

Future Ceramic will manufacture value added large format glazed vitrified tiles (GVT) in 800x1600 mm and 800x2400 mm formats, with an installed capacity of 6.6 million square metre per annum. The plant is estimated to cost around Rs 175 crore.

The second unit, AGL Sanitaryware will manufacture sanitaryware products.

Currently, AGL deals in a range of sanitaryware products manufactured through third-party manufacturers and imports. This plant, which will scale up the sanitaryware segment, will have an installed capacity of 0.66 million pieces per annum, and will cost around Rs 50 crore.

Another unit, AGL Surfaces will manufacture innovative new age stone plastic composite flooring, and will have an installed capacity of 2.97 million sq metre of flooring per annum. This unit will come at an investment of around Rs 35 crore, he said, adding all the three plants will come up in Morbi.

The company will also set up a large display centre in Morbi to showcase AGL group's entire product range under single roof, spread across 1.5 lakh sq ft area. It will come at an investment of around Rs 40 crore.

Established in 2000, Asian Granito is among the four largest luxury surfaces and bathware solutions brands in the country now. It manufactures and markets a wide range of tiles, engineered marble and quartz, sanitaryware and faucets.

AGL had reported Rs 1,292 crore revenue in FY21 and exports to over 100 countries.

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