Grasim Industries Ltd’s shares fell by more than 8% after it announced its highest Ebitda (earnings before interest, tax, depreciation and amortization) ever. Ebitda in its stand-alone business rose an impressive 36% year-on-year to 1,070 crore.

But Grasim’s fortunes aren’t merely determined by the performance of the viscose staple fibre and chemicals businesses. It is also a holding company that houses stakes in cement, telecom and financial services firms within the Aditya Birla Group.

Investors’ latest worry is that Grasim’s 11.55% stake in Vodafone Idea Ltd is proving to be a bigger drag than what they had feared. The telecom firm announced fundraising plans worth 25,000 crore on Wednesday, and Grasim’s share is likely to be around 2,900 crore.

“Grasim would like to maintain its current stake in the company as it finds current valuations in the telecom sector very attractive. It will also consider the valuations while deciding on subscription to any rights issue by Vodafone Idea," analysts at Edelweiss wrote in a note to clients after attending Grasim’s conference call with investors.

As it is, the company has had to write down its investment in Vodafone Idea by about 2,000 crore, thanks to the huge drop in the telecom firm’s valuations this year.

Investors’ reaction to the fundraising plans clearly show they see it as good money going after bad. Not only did Grasim’s shares fall on Thursday, but even Vodafone Idea’s shares fell by more than 10%. This is despite the news that the promoters are planning to bring in $2.5 billion to strengthen the company’s balance sheet.

It’s likely that the company may need to infuse capital into Aditya Birla Capital Ltd as well to support its growth. These potential capital commitments are likely to act as an overhang on the Grasim stock, says analysts at Edelweiss.

For investors, it simply means there is no easy way to benefit from the growth in the core business. Grasim’s various other commitments and connections mean that there are various other risks to consider while buying the stock.

It’s little wonder that the viscose staple fibre and the chemicals business are valued at a high discount. After applying a 50% haircut, the value of its various holdings in group firms adds up to about 43,000 crore. With Grasim’s market cap at 53,000 crore currently, this means the core business is valued at about 4.2 times estimated earnings for the year till March 2020, using earnings estimates from Edelweiss.

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