Rainbow Papers Ltd, an Ahmedabad-based company engaged in the manufacturing of paper and paper products, has raised $27 million (Rs 125.37 crore) via global depository receipts (GDR). It plans to utilize the proceeds in capacity expansion, said the company in a statement.

Rainbow is now pursuing a Rs 327-crore expansion plan to increase the manufacturing capacity to over 3 lakh tonne per annum. It would also install a thermal power plant to support the expansion that would generate additional 30 MW power for the company, added the statement. Rainbow, which currently produces 15 MW power, also plans to sell the residue amount to other merchants.

Out of the total Rs 327 crore spends, the company has already tied up with banks for a debt of around Rs 200 crore, while the balance will be through internal accruals.

“This would reinforce our position in the existing segments and allow us to enter several other categories which offer better margins,” Ajay Goenka, chairman and managing director said in the statement.

Ashika Capital Ltd and Headway Capital Advisors Ltd acted as the advisors to Rainbow Papers for the transaction.

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