NAME: AKSHAY NARENDRA JAGTAP

EMAIL ID: akshay.jagtap@svims.com

COMPANY: GRASIM INDUSTRY LTD.

INTRODUCTION TO
GRASIM INDUSTRY LTD.
 Introduction

Grasim Industries Limited, a flagship company

of the global conglomerate Aditya Birla Group, ranks
amongst the top publicly listed companies in India.
Incorporated in 1947, it started as a textile’s
manufacturer in India. Incorporated in 1947, it started as
a textile’s manufacturer in India. Today, it has evolved
into a leading diversified player with leadership
presence across many sectors. It is a leading global
producer of Viscose Staple Fibre, the largest Chlor-
Alkali, Linen and Insulators player in India. Through its
subsidiaries, UltraTech Cement and Aditya Birla
Capital, it is also India’s largest cement producer and a
leading diversified financial services player. At Grasim,
there is an endeavour to create sustainable value for
24,000+ employees, 230,000+ shareholders, society and
customers. It has a consolidated net revenue of over
US$ 10.95 Billion and an EBITDA of over US$ 1.95
Billion in FY 2020.
 History
Grasim Industries Limited was incorporated in 1947; Grasim
is the largest exporter of Viscose Rayon Fiber in the country, with
exports to over 50 countries. Grasim is headquartered in Nagda,
Madhya Pradesh and also has plants at Kharach (Kosamba, Gujarat),
Bharuch (Vilayat GIDC, Gujarat) and Harihar, Davangere in the state
of Karnataka.
Indo-Thai Synthetics Company Ltd was incorporated in 1969 in
Thailand, started operations in 1970, this was Aditya Birla Group's
first foray into international venture. Aditya Birla Group
incorporated P.T. Elegant Textiles in 1973 in Indonesia. Thai Rayon
incorporated in 1974, this was the second company in Thailand,
operating in Viscose Rayon Staple Fiber. Century Textiles Co. Ltd. is
taken over by Aditya Birla Group in 1974; this company is a weaving
and dyeing plant manufacturing and exporting variety of synthetic
fabrics. PT Sunrise Bumi Textiles incorporated in 1979, it produces
yarn exported over 30 countries in 6 continents. P.T Indo Bharat
Rayon incorporated in 1980 produces Viscose Staple Fiber in
Indonesia. Thai Polyphosphates and Chemicals was started in 1984 in
Thailand to produce Sodium Phosphates, and has merged with Thai
Epoxy and Allied Products Company Limited (1992), Thai Sulphites
and Chemicals Company Limited (1995) to form Aditya Birla
Chemicals Ltd. This company supplies to sectors such as food,
textiles, electrical and electronics, composites, leather, plastics and
automobiles. PT Indo Liberty Textiles was incorporated in 1995 to
manufacture synthetic spun yarn.
In late 1990s and later, the focus was the textile business
following the end of Multi-Fiber Arrangement (MFA).
AV Cell Inc., a joint venture between Aditya Birla Group and
Tembec, Canada, established operations in 1998 to produce softwood
and hardwood pulp for the purpose of internal consumption among
different units of the Group.
 BACKGROUND OF COMPANY
Together, Grasim Industries Ltd. and Tembec, Canada acquired AV
Nackawic Inc., which produces dissolving pulp. Grasim Industries Ltd. supplies
Viscose Staple Fiber (VSP). The Aditya Birla Group's VSF manufacturing
plants are in Thailand, Indonesia, India and China.
The Group's VSF business operates through its three companies – Grasim
Industries in India, Thai Rayon Corporation in Thailand and Indo Bharat Rayon
in Indonesia, which also oversees its Chinese operations at Birla Jingwei Fibres,
China.
In 2003, its Chemical Division was awarded the "Best of all" Rajiv
Gandhi National Quality Award.
Grasim sponsored Grasim Mr. India event from 1994 to 2012 that sent
the winner to compete in international events like Mister
International and Mister World.

Grasim Industries Ltd a flagship company of the Aditya Birla Group ranks
among India's largest private sector companies. It is a leading global player in
viscose staple fibre (VSF) the largest chemicals (Chlor-Alkalis) largest cement
producer and diversified financial services (NBFC Asset Management and Life
Insurance) player in India. The chemical business was set up given it's a critical
input for manufacturing VSF and to achieve backward integration. Grasim is the
largest Caustic Soda producer in India with a capacity of 840 KTPA. Grasim's
subsidiary UltraTech Cement Limited is a leading global cement manufacturer
with a capacity of 93 MTPA in India (includes 4 MTPA overseas). The
company has four segments: Fibre and Pulp Chemicals Cement and Textiles.
Fibre and Pulp segment includes Viscose Staple Fibre and Rayon Grade Pulp.
Chemicals include Caustic Soda and Allied Chemicals. In cement Grasim
through their subsidiary UltraTech Cement Ltd (UltraTech) has a capacity of 93
million tonnes per annum (MTPA) of grey cement. The cement segment
includes Grey cement Ready-mix concrete and White cement. Textile segment
includes yarn. Their textile subsidiary is Grasim Bhiwani Textiles Ltd.

The company's other subsidiaries include Sun God Trading and

Investments Ltd Harish Cement Ltd and Dakshin Cements Ltd. The company is
India's pioneer in viscose staple fibre (VSF) a man-made biodegradable fibre
with characteristics akin to cotton. The company's VSF plants are located at
Nagda in Madhya Pradesh Kharach in Gujarat and Harihar in Karnataka. The
company is a global leader in viscose staple fibre (VSF) with 9% global share.
Grasim has presence in the financial services business through its holding in
Aditya Birla Capital Limited (ABCL). As on 31 December 2017 Grasim's direct
holding in ABCL stood at 55.99%. ABCL is the holding company for all the
financial service businesses of the Aditya Birla Group. ABCL has a strong
presence across life insurance asset management private equity corporate
lending structured finance general insurance broking wealth management equity
currency and commodity broking online personal finance management housing
finance pension fund management and health insurance businesses. Grasim
directly held 23.14% stake in Idea Cellular Limited (Idea) as on 23 February
2018. Idea is the third largest wireless operator in India with a Revenue Market
Share (RMS) of 18.8% (Q4 FY 2017). Grasim Industries Ltd was incorporated
on August 25 1947. In the year 1950 the company started production of fabrics
at Gwalior with imported man-made rayon. In the year 1954 they commenced
VSF production at Nagda in Madhya Pradesh. In the year 1962 they set up of
Engineering Division for plant and machinery for VSF. In the year 1963 they
started composite textile mill at Bhiwani in Haryana. In the year 1968 they
commenced Rayon production at Mavoor Kerala.In the year 1972 the company
commenced production of rayon grade caustic soda for VSF production at
Nagada. In the year 1977 the company started production at their third rayon
plant at Harihar in Karnataka. In the year 1985 Vikram Cement the company's
first cement plant went on stream at Jawad in Madhya Pradesh. In the year 1987
they commenced second production line of Vikram Cement. In the year 1991
they added the third production line of Vikram Cement. In the year 1992 the
company set up Birla International Marketing Corporation (BIMC) a merchant
exporter. In the year 1993 they commissioned Vikram Ispat India's third largest
gas-based sponge iron plant. Also, they set up Birla Consultancy & Software
Services to provide IT consulting services and for software development. In the
year 1995 the company commissioned two greenfield cement plants namely
Grasim Cement at Rawan in Chhattisgarh and Aditya Cement at Shambhupura
in Rajasthan. In the year 1996 they commissioned the first phase of the
company's fourth VSF plant at Kharach in Gujarat. In the year 1999 the
company's viscose staple fibre (VSF) and rayon grade pulp units at Mavoor
were closed down owing to lack of raw material. In the year 1998 the cement
business of Indian Rayon and Industries Ltd a group company was demerged
and transferred to the company. Also, the company in association with Timbec
Inc set up a joint venture company namely Atholville Pulp Mill at Canada. In
the year 2000 the company set up the Lawson Competency Centre as a division
of Birla Consultancy & Software Services the software arm of Grasim following
a tie up with Lawson Software (USA). In the year 2001 the company demerged
the Consultancy and software service into a separate entity namely Birla
Technologies Ltd. They commissioned four Ready-Mix Concrete plants with an
aggregate capacity of one million cubic meters. In October 2002 the company
acquired 10% stake in L&T and increased their stake to 15.3%. In the year 2002
the company divested Gwalior textiles unit and the textile operations were
consolidated at Bhiwani to manufacture 'Grasim' and 'Graviera' brands. Also,
Dharani Cements Ltd merged with the company. The company set up VSF
Research & Application Centre at Kharach in Gujarat. In the year 2004 the
company acquired the controlling stake in UltraTech CemCo Ltd (now
UltraTech Cement Ltd). In the year 2005 the company acquired St. Anne
Nackawic Pulp Mill Canada with Tembec Inc. In the year 2006 the company
formed a joint venture company Birla Jingwei Fibres Company Ltd. Also, they
acquired VSF plant in China. In the year 2007 the company divested their share
in Shree Digvijay Cement Company Ltd. They transferred textile units at
Bhiwani to a subsidiary company Grasim Bhiwani Textiles Ltd. Also, they
commissioned eighteen ready-mix concrete plants. In the year 2008 the
company commissioned brownfield expansion at Aditya Cement at
Shambhupura (Rajasthan). During the year 2009-10 the company completed
their ongoing cement expansions and commissioned the 3.1 million TPA
grinding capacity at Kotputli Rajasthan. In May 22 2009 the company hived off
their sponge iron business by way of slump sale. As per the scheme of
arrangement the cement business of the company was demerged into Samruddhi
Cement Ltd (Samruddhi) a subsidiary of the company with effect from October
1 2009. Concurrently Samruddhi Cement Ltd was amalgamated with UltraTech
Cement Ltd with effect from July 1 2010.During the year 2010-11 the company
acquired 1/3rd stake in Aditya Holding AB Sweden a leading manufacturer of
specialty pulp used in the manufacture of VSF which acquired Domsjo Fabriker
AB (Domsjo) Sweden at an enterprise value of Swedish Kroner (SEK) 2.12
Billion (approx. Rs 1570 crore).In September 2010 UltraTech completed
acquisition of ETA Star Cement Company LLC comprising of 2.3 million TPA
clinker facility and grinding units of 2.1 million TPA in UAE 0.4 million TPA
in Bahrain and 0.5 million TPA in Bangladesh. With this acquisition UltraTech
gained direct access to the markets in the Middle East and neighbouring regions.
Consequent to this acquisition UltraTech's capacity stands augmented at 52
million TPA. In August 2011 the company acquired Aditya Birla Power
Ventures Ltd and thus Aditya Birla Power Ventures Ltd became a subsidiary
company. In 2014 Grasim commissioned its state-of-the-art VSF plant at
Vilayat in Gujarat. On 11 February 2015 the Board of Directors of Grasim
Industries approved the proposed merger of Aditya Birla Chemicals (India)
Limited (ABCIL) with Grasim. The swap ratio approved by the board was one
equity share of Grasim for every 16 shares of ABCIL held on record date. On 5
January 2016 ABCIL announced the completion of merger process with Grasim
Industries. The Board of Directors of Grasim Industries Aditya Birla Nuvo
Limited (ABNL) and Aditya Birla Financial Services Limited (ABFSL) at their
respective meetings held on 11 August 2016 approved the merger of ABNL into
Grasim and the subsequent demerger and listing of its financial services
business through a composite scheme of arrangement. ABNL is a diversified
conglomerate with various business interests including manufacturing of
fertilizers viscose filament yarn chemicals insulators textiles etc. financial
services and telecom. The financial services business is a division of ABNL and
is engaged in the activity of fund-based lending making holding and nurturing
investments in financial services sector. As per the swap ratio for merger each
shareholder of ABNL will get 3 equity shares of Grasim for every 10 equity
shares held in ABNL on record date. For demerger of financial services business
into ABFSL each shareholder of Grasim (post-merger) will receive 7 equity
shares in ABFSL for every 1 equity share held in Grasim. On 1 June 2017 the
National Company Law Tribunal (NCLT) approved the Composite Scheme of
Arrangement involving the merger of Aditya Birla Nuvo (ABNL) with Grasim
to be followed by the listing of Aditya Birla Financial Services Ltd (ABFSL).
The merger of ABNL with Grasim became effective from 1 July 2017. The
name of Aditya Birla Financial Services was changed to Aditya Birla Capital
Limited (ABCL) on 21 June 2017. ABCL got listed on the stock exchanges on 1
September 2017. ABCL is the holding company of all the financial service
businesses of the Aditya Birla Group. It has a significant presence across several
business sectors including NBFC asset management life insurance health
insurance and wellness housing finance private equity general insurance broking
wealth management broking online personal finance management and pension
fund management. On 12 December 2017 Grasim announced that it has
received the rights to manage and operate Viscose Filament Yarn (VFY)
business of Century Textiles & Ind. Ltd. (CTIL) from CTIL for a period of 15
years. Consequently, Grasim will have Right to Use' the relevant assets. The
ownership of the assets will remain with CTIL. CTIL has installed capacity of
25000 tonnes of VFY. With Grasim's VFY capacity of 21300 tonnes the
combined capacity will increase to 46300 tonnes. As part of the transaction
Grasim will pay to CTIL commuted value of royalty of Rs 600 crore refundable
security deposit of Rs 200 crore and net working capital at closing estimated at
Rs 165 crore. On 16 March 2018 Grasim Industries announced that the
production capacity of epoxy resin reactive diluents and hardeners at the
company's epoxy plant at Vilayat (Gujarat) has increased from 82350 metric
tonnes (MT) per annum to 1.23 lakh MT per annum through de-bottlenecking
process.
MANAGMENT TEAM OF THE GRASIM
INDUSTRY

Mr. Kumar Mangalam Birla, Chairman, Aditya Birla Group

Managing Director of Aditya Birla Group

 Mr. Dilip Gaur

Mrs. Rajashree Birla

Non-Executive Director
 Kalyan Ram Madabhushi

Chief Executive Officer - Global Chemicals

Group Business Head- Fertilisers & Insulators
 Mr. Ashish Adukia

Chief Financial Officer, Grasim Industries

 Services of the company

Grasim Industries Limited is the flagship company of the Aditya Birla Group. It
started as a textile’s manufacturer in India in 1947. Today, it is a leading global
player in VSF and the largest chemicals (Chlor-Alkali-s) player in India. It is also the
largest cement producer and Diversified Financial Services (NBFC, Asset
Management and Life Insurance) player in India through its subsidiaries UltraTech
Cement and Aditya Birla Capital.

Grasim Industries Limited is the holding company of the following

businesses:

Jaya Shree Textiles:

Jaya Shree Textiles, part of the illustrious Aditya Birla Group, is India's top
linen brand manufacturing company. Set up in 1949, it is the first integrated Linen
factory in the country with state-of-the-art facilities equipped with the latest spinning,
weaving and finishing system from Switzerland and Italy. A leading player in the
domestic linen and worsted yarn segment, the company has significantly
revolutionised the Indian textile market by popularising 'linen' in India across a wide
customer base with its brand "Linen Club".

Linen Club is the pioneer linen brand in India with over six decades of
experience. A brand that is today inseparable from the paradigm of fine linen in
India and the world. It has been at the forefront of developing the linen market
and introducing this wonder fabric to the discerning Indian consumers.

Linen Club offers the widest range of designs and colours in the world. An
accomplished in-house design team including internationally acclaimed Italian
designers produce close to 1000 new designs every month. Linen Club’s fabric
range includes fine and super fine linen fabrics; amongst the best in the world.
Certified by the European Confederation of Linen and Hemp (CELC), the only
European agro-industrial organization federating all the stages of production and
transformation for linen & hemp, Linen Club has always prided itself for
producing a superlative quality of linen fabric .Today, with 180+ exclusive
brand outlets, Linen Club boasts of having the world’s largest retail chain in
Linen.

Linen Club enjoys leadership status in the Indian market and is a brand of
choice for linen connoisseurs across India. Staying true to the fabric, the brand
brings alive the cloth’s essence which complements the personality of the man
who wears it. A man who is truly ‘Made for the Different’. The brand is
endorsed by Farhan Akhtar- a leading Bollywood actor, singer, director, writer.

Building on its reputation and its unmatched expertise in the field of linen,
Linen Club has now forayed into Ready-to-Wear garments and accessories
under the brand “Linen Club Studio”. Linen Club Studio range includes finely
crafted Shirts, Trousers, Jackets, Kurtas, T-shirts and accessories. Available in
infinite colours, designs and fits, the collection scales new peaks of aesthetic
and qualitative brilliance.
 Product of the Company
 Cement
 Rayon Grade pulp
 Chemicals
 Fertilizer
 Viscose Staple Fiber
 Ready mix concrete
 Textile
 Insulators
 SWOT Analysis of the company

Grasim Industries to benchmark its business & performance as compared

to the competitors and industry. Grasim Industries is one of the leading brands
in the real estate and construction sector.

The table below lists the SWOT (Strengths, Weaknesses, Opportunities,

Threats), top Grasim Industries competitors and includes Grasim Industries
target market, segmentation, positioning & Unique Selling Proposition (USP).

Grasim Industries Brand Analysis

Aditya Birla Group

Parent Company

Construction Materials
Category

Real Estate and Construction

Sector

-
Tagline/ Slogan

Trust and Quality

USP

Grasim Industries STP

Grasim Industries Rural/Urban areas, Tier I/Tier II cities, Public/Private Sector

Segmentation
Grasim Industries Customers in Urban or Tier I and Tier II Cities looking for construction materials
Target Market

Grasim Industries A brand you can trust

Positioning

Grasim Industries SWOT Analysis

Below are the Strengths in the SWOT Analysis of Grasim Industries:

1. The company is a subsidiary of Aditya Birla Group, which operates over 40
companies in 10+ countries
2. Grasim is the world's second largest producer of viscose rayon fiber with a
significant market share
Grasim Industries 3. Strong brand equity of Aditya Birla Group
Strengths 4. Birla Group having operations in diverse sectors helps its subsidiaries to grow
in all aspects
5. Grasim has a workforce of around 7000 efficient employees
6.Grasim Industries deals in production of Fibre and pulp, chemicals, cement and
textiles

Here are the weaknesses in the Grasim Industries SWOT Analysis:

Grasim Industries 1.Grasim industries have fluctuating sales which can affect profitability
2.Input costs have risen for Grasim industries which has resulted in reduced
Weaknesses
profits

Following are the Opportunities in Grasim Industries SWOT Analysis:

1.Grasim Industries should focus on increasing branding activities, this can result
into higher sales and in turn it can gain its lost shares back
2.Aditya Birla Group has a huge brand equity attached with it, being a part of
Grasim Industries such a group is something the company should take leverage of and build its
Opportunities operations around
3. It can expand its operations to other countries
4. With increase in construction activities, demand for cement is rising, this a
huge opportunity for Grasim Industries to push their products
 The threats in the SWOT Analysis of Grasim Industries are as mentioned:
1.Grasim Industries is facing a huge competition from other key players in the
Grasim Industries respected segments
Threats 2.Cheaper local brands are increasing their hold in the country, so it might impact
top players like Grasim Industries

Grasim Industries Competition

Below are the top 4 Grasim Industries competitors:

1. 3M India ltd
2. L&T ltd
Competitors
3. Reliance Industries ltd
4. EICL ltd.
 Conclusion
 8% of customers have used Graviera products. Raymond and SiyaRam have
very good Brand image.
 A Graviera suiting is ranked sixth after Raymond, SiyaRam, Donear, and Vimal
& Gwalior. Competitors of Graviera are Gwalior, Siyaram, kumars and Mayur.
 Graviera products are available at 9 out of 140 retail outlets. So, products
availability is low.
 Quality of Graviera Suiting is good. But company is spending very low on
advertisement.
 Awareness level of Graviera is good and it can be improved by using Electronic
and print Media.
 Customers most preferred buying range is 150-200 per meter.
 Awareness level of “Mr. India “contest conducted by Graviera very is low but it
will catch after some years.
 Graviera products are bought mainly for Trousers and most of the customers are
not satisfied with Graviera products
 Recommendation
Post transaction, all the businesses will be different in
terms of risk and return. Losses of one division can hamper
the profitability of other division. It’s rapidly growing finance
division will continue to be the subsidiary of Grasim. From
the minority shareholders’ point of view, the merger will have
ended up with ownership in different businesses. One who
likes to invest only in cement or telecom business will
definitely fret with the announcement.

Currently, as there is no financial business in Grasim,

direct de-merger of financial business from Nuvo would have
created much more value for the shareholders of Nuvo.
However, if they would have done that, financial business
which constitute 40% of the revenue of Nuvo, would have
impacted Nuvo’s valuation and promoters’ shareholding in
Grasim post-merger would have been much lesser than
proposed 38.82%. Nuvo’s shareholders will have to share the
listing benefits of financial services business with the
shareholders of Grasim. Grasim shareholders will get shares
of Nuvo’s financial business without paying anything. Further,
promoter holding in ABFSL is structured in such a way that
they can exercise greater control and voting powers despite
having a low equity stake.

Post announcement, the share price of both the

companies plummeted which shows that investors are not
really cherishing Birla group’s decision. Definitely, the deal is
going to be a cherry on the cake for the promoters but for
minority shareholders it is going to be a roller coaster ride. To
get the transaction through, Aditya Birla group will require a
majority vote from the minority shareholders. Now the ball is
in the institutional investors’ court. Probably going ahead, we
can see another ‘Vedanta’ story happening with Grasim.