Shalimar Paints Ltd. is eyeing a turnaround with a likely capital infusion of ₹200 crore through a proposed rights issue.
The company, which had been reporting losses for the last two years and facing capacity constraints, is planning to open the rights issue in late November to generate funds for capacity expansion and meet working capital requirement, a top official said.
“While the market has been growing by 10 to 12% for several years, we have not been able to benefit due to capacity constraints and two fire accidents which were major setbacks,” said Ashok Kumar Gupta, vice-chairman, Shalimar Paints.
ADVERTISEMENT
“However, now we have ambitious plans and there are many opportunities to grow. Our biggest problems are working capital and capacity constraints. Out turnover is not even 1% of the ₹50,000-crore market which makes it difficult for us to survive,” he said.
“So, we are coming out with a rights issue. With that money, we will increase our capacity, initially by around 50% at our Nashik plant. ,” Mr. Gupta added.