The board of Kesoram Industries Ltd will meet on February 18 to consider raising fresh capital by way of a rights issue or preferential allotment.

The meeting will take place just a week after announcing the third-quarter result — a weak set of numbers that clearly underscored the need to pare debt to bring the company back in the black on a sustainable basis.

The Telegraph had reported on February 12 that promoters may infuse fresh equity capital in Kesoram, which earns around 90 per cent of its revenue from cement, having carved out the chronically loss making tyre business into a separate listed entity.

Kesoram Industries, the flagship of BK Birla Group, has a debt of Rs 2,000 crore. The management is aiming to bring this down by Rs 700 crore in the medium term. It wants to reach substantially closer to that target — about Rs 500 crore — in the next fiscal itself.

A communication from Kesoram, which is being run by Manjushree Khaitan, the daughter of late B. K. Birla, said the shareholders’ approval, after the board’s go-ahead, would be taken for the capital raising, if required. Even as the Kesoram stock had crashed nearly 10 per cent after the third-quarter result, it recovered by about 4 per cent after the company announced its capital raising plans. It ended the day at Rs 45.65 apiece.

Earlier, the promoters had infused Rs 665 crore via a rights issues and preferential allotment to stabilise the company.

Two companies, which are under the effective control of Kumar Mangalam Birla, the grandson of B.K. Birla and chairman of Aditya Birla Group, are large promoter shareholders of Kesoram. While Pilani Investment and Industries holds a 19.17 per cent stake, Century Textile owns 3.59 per cent in Kesoram. The market would be keenly watching the support from Aditya Birla Group, now busy managing the AGR mess at Vodafone Idea.