Piramal Capital and Housing Finance Ltd, a part of Piramal Enterprises Ltd, has raised $300 million through its first US dollar-denominated bond. The company plans to increase its overseas borrowing to 10-15% of its total liabilities within the next 2 to 2.5 years, according to managing director Jairam Sridharan.
“Over time, I want to reach a point where 10-15% of our liabilities come from international borrowing in the next 2 to 2.5 years. After this issue, the share is now around 4%,” Sridharan said in an interview. “We plan to issue multiple bonds in the future to reach this goal.”
“In the short term, in FY25, we will issue more bonds to meet the remaining demand.” The next issue is expected to be $100-200 million and will be raised in the next 3-4 months, Sridharan added.
The $300 million bond issue consists of fixed-rate senior secured sustainability bonds with a 7.95% yield over 3.5 years. The company received a ‘BB-‘ rating from S&P and a ‘Ba3’ rating from Moody’s, both with a stable outlook.
Standard Chartered Bank, Barclays, and Deutsche Bank acted as joint global coordinators and joint bookrunners, with Axis Bank, Citi, and Emirates NBD also serving as joint bookrunners.
The bonds, listed on the International Exchange IFSC (India INX), received bids totaling around $1.3 billion, more than four times the $300 million issue size. On the listing day, the yield fell 15 basis points to 7.80%, showing strong investor interest.
“We issued only $300 million to establish our presence and open up the international market for future funding,” Sridharan explained.
The issue was allocated to 115 different investors to diversify the company’s borrowing profile and reduce dependence on domestic markets.
“Our borrowing cost is 8.9%, with new borrowing around 9.25%. The overseas issue costs about 7.9%, plus hedging and other costs of about 2.5%.”
This bond issue follows a ₹2,000 crore infusion from Piramal Enterprises in March 2024 and a recent $100-million social impact loan with Standard Chartered Bank.
The company also plans to raise ₹500-1,000 crore through a domestic bond issue in the second half of the financial year, depending on interest rates and market conditions, Sridharan said.
“We need a lot of funds for our retail lending side, disbursing ₹7,000-8,000 crore each quarter, so the $300 million will be quickly used in the retail business.”
The accelerated fundraising aims to build liquidity ahead of the proposed merger with its parent company, especially since liquidity for most NBFCs has decreased over the past 9-12 months.
“We want to increase our liquidity to have a more flexible balance sheet. We will continue to raise money to fund growth and improve liquidity.”
The company aims to maintain four months of financial outgo as a liquidity buffer, Sridharan said.
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