Grasim Industries Limited has approved a ₹3,094 crore capital expenditure plan for the second phase of its Lyocell fiber expansion at Harihar, Karnataka, as the Aditya Birla Group company looks to strengthen its position in specialty fibers.
The expansion follows the ongoing Phase I project at the same location and forms part of Grasim’s strategy to increase the share of value-added fibers in its portfolio.
Shares of Grasim Industries were trading at ₹3,094, giving the company a market capitalization of ₹2.11 lakh crore. The stock’s 52-week range stands between ₹2,502 and ₹3,197.
Phase II project details
The Phase II expansion will comprise two production lines with a capacity of 55,000 tonnes per annum (TPA) each.
Timeline
- First line: Expected by mid-2028
- Second line: Expected by mid-2030
Phase I, which is already under construction, is scheduled for commissioning by mid-2027.
After completion of both phases, Grasim’s total Lyocell capacity is expected to reach nearly 210,000 TPA.
Funding plan
The company plans to finance the project through:
- Internal accruals
- Borrowed funds
Investments will be made in phases over the four-year construction period.
During FY26, Grasim operated its existing 890,000 TPA cellulosic staple fiber capacity at 97 percent utilization, indicating limited room for further growth from current assets.
Focus on specialty fibers
Lyocell is a third-generation cellulosic fiber produced through a closed-loop solvent process that recycles more than 99 percent of the chemicals used.
Compared with conventional viscose, the fiber:
- Uses less water
- Generates fewer effluents
- Offers better tensile properties
It finds applications in:
- Premium apparel
- Home textiles
- Technical textiles
Targeting a larger specialty fiber mix
By 2030, Grasim aims to increase the share of specialty fibers to 35 percent of its overall portfolio.
The specialty segment includes:
- Lyocell
- Modal
- Dope-dyed fibers
- Recycled variants
The company expects higher-value fibers to improve its product mix and reduce India’s dependence on imported Lyocell.
Business profile
Grasim Industries, incorporated in 1947, is the flagship company of the Aditya Birla Group.
Its standalone businesses include:
- Cellulosic fibers
- Caustic soda
- Specialty chemicals
- Rayon-grade wood pulp
On a consolidated basis, the company also owns:
- UltraTech Cement
- Aditya Birla Capital
- Birla Opus paints
Q4 FY26 performance
The company reported its highest-ever quarterly revenue during Q4 FY26.
| Particulars | Q4 FY26 | Growth YoY |
|---|---|---|
| Revenue | ₹51,101 crore | 15% |
| EBITDA | ₹8,011 crore | 22% |
| Net Profit | ₹3,802 crore | 28% |
FY26 performance
| Particulars | FY26 | Growth YoY |
|---|---|---|
| Revenue | ₹1,75,431 crore | 18% |
| EBITDA | ₹25,872 crore | 29% |
| PAT | ₹10,300 crore | 33% |
Key highlights
| Particulars | Details |
|---|---|
| Capex approved | ₹3,094 crore |
| Location | Harihar, Karnataka |
| New capacity | 110,000 TPA |
| Total Lyocell capacity target | 210,000 TPA |
| Existing cellulosic fiber capacity | 890,000 TPA |
| FY26 utilization | 97% |
| Specialty fiber mix target by 2030 | 35% |
TL;DR:
Grasim Industries has approved a ₹3,094 crore investment for Phase II Lyocell expansion at Harihar, Karnataka. Once Phase I and II are completed, the company’s Lyocell capacity is expected to reach nearly 210,000 TPA by 2030.
AI summary:
- Grasim approved a ₹3,094 crore capex plan.
- The project will add 110,000 TPA of Lyocell capacity.
- Total Lyocell capacity will reach nearly 210,000 TPA.
- Phase II will be commissioned between 2028 and 2030.
- The company aims for specialty fibers to account for 35% of its portfolio by 2030.
