Shareholders of Kesoram Industries are in for a treat as the board decided to offer a rights issue at a steep 44 per cent discount to the market price. Dispersed over a period of six months, eligible shareholders will pay Rs 50 a share in two equal tranches to subscribe to the offer compared with the closing price of Rs 89.45 on Thursday.

The company plans to raise Rs 400 crore primarily to reduce the high interest bearing debt burden which stood at Rs 1,850 crore at the end of the last fiscal.

It has set a target to bring down debt by Rs 450 crore by the end of the fiscal through improved earnings and the rights issue proceeds and another Rs 350 crore by August next year. “We have a target to reach a debt level of Rs 1,100 crore by this time next year,” said P. Radhakrishnan, CEO and whole-time director of Kesoram.

The company recorded an EBIDTA of Rs 187 crore in the June quarter of 2021 compared with Rs 110 crore in the same period last year. It made a profit of Rs 13.8 crore compared with Rs 17.85 crore loss a year ago. Profit was impacted by the interest burden of Rs 118.66 crore.

The board also approved the induction of Satish Jajoo as an additional director. Jajoo has 38 years of experience of working with Ultratech, Grasim and Hindalco.

Entities controlled by AV Birla Group chairman Kumar Mangalam Birla hold close to 20 per cent in Kesoram.