Grasim will spend ₹3,094 cr to triple its Lyocell fibre capacity by 2030
The board approved two new 55,000-tonne lines at Harihar, taking total Lyocell capacity to 210,000 tonnes. The investment is 1.5% of market cap and won't hit earnings for years.
— 2 earlier stories on Grasim Industries Ltd. →What's new
- Board cleared ₹3,094 cr capex for two 55,000-tonne Lyocell lines, due mid-2028 and mid-2030.
- Adds to a third 55,000-tonne line already under construction, due mid-2027.
- Total Lyocell capacity will reach ~210,000 tpa; total cellulosic staple fibre to cross 1 million tpa by 2030.
Why this matters
This is a measured bet on a high-growth sustainable fibre, not a balance-sheet-altering move. At 1.5% of its ₹2.1 lakh crore market cap, the check is manageable. The long timeline means the capital is deployed years before any earnings benefit.
What we're watching
- Commissioning of the first new line (mid-2028) after the initial 55,000-tpa line comes online.
- Execution costs and timeline adherence for the second line (mid-2030).
- The resulting shift in specialty product mix within Grasim's fibre business.
The full read
Grasim Industries is spending ₹3,094 crore to roughly triple its Lyocell fibre capacity. The board approved two new 55,000-tonne lines at Harihar, with the first due mid-2028 and the second mid-2030. They follow a third 55,000-tonne line already under construction, due mid-2027. The combined 210,000-tonne Lyocell output will cement Grasim as one of the world's largest producers. The investment is a 1.5% slice of the company's ₹2.1 lakh crore market cap. It will be funded by internal cash and debt. The strategic logic is clear, but the payoff is distant. Total cellulosic fibre capacity will cross 1 million tonnes annually by 2030, and specialty products are expected to make up 35% of the fibre mix. For now, this is capital being committed to a long-term structural play.
Questions answered
- What exactly is being built?
- Two new Lyocell fibre lines with a combined capacity of 110,000 tonnes per annum at the Harihar plant. Each line will produce 55,000 tonnes annually.
- How does this change Grasim's total capacity?
- It joins a third 55,000-tonne line already under construction. When all three are live, Grasim's Lyocell capacity will reach nearly 210,000 tonnes per annum, and total cellulosic staple fibre capacity will surpass 1 million tonnes annually.
- How significant is the investment for a company of this size?
- The ₹3,094 crore capex is about 1.5% of Grasim's ₹2.1 lakh crore market capitalisation. It will be funded through internal accruals and borrowed funds.
- When will the new capacity be operational?
- The first of the two newly approved lines is expected by mid-2028, and the second by mid-2030. An earlier line is already under construction and due for commissioning by mid-2027.
Story so far
All notes on GRASIM →- 8 Jun 2026 · 6:24 PM IST Grasim will spend ₹3,094 cr to triple its Lyocell fibre capacity by 2030
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