Piramal Capital Aims Up to $400 Million via Bond Issue with Barclays, Citigroup, and Deutsche Bank Leading Charge

Mumbai: Non-bank lender Piramal Capital, which acquired Dewan Housing Finance in a successful debt resolution, plans to raise up to $400 million through its first overseas bond issue. Deutsche Bank, Barclays, Standard Chartered, Citigroup, and Emirates NBD are leading this initiative. This bond issue follows Piramal’s recent $100 million ECB loan, marking the company’s initial step into international financing.

The roadshow started on Friday, with Piramal’s management meeting investors in Singapore and Hong Kong over the next few days.

Raising Funds

Initially, Piramal aims to raise $300 million, potentially increasing to $400 million if there is strong demand. The company is taking a cautious approach to better understand market dynamics. The proceeds will support Piramal’s retail business, which has grown by 50% annually over the past two years.

No Comments

A spokesperson for Piramal did not respond to requests for comments, while Deutsche Bank, Barclays, and Standard Chartered declined to comment. Citigroup and Emirates NBD could not be immediately reached for their responses.

Exploring Foreign Capital

Encouraged by the Reserve Bank of India’s (RBI) push for NBFCs to seek funding beyond domestic banks, Piramal is exploring foreign capital pools. Most of Piramal’s ₹55,000 crore borrowing is domestic, but the company is cautiously adding foreign debt to diversify its borrowing profile. Piramal’s borrowings are diversified across NCDs, bonds (51%), loans (32%), and pass-through certificates (9%). This overseas bond issue will further diversify its funding sources.

Interest from Global Investors

Piramal held a non-deal roadshow in May, which garnered strong interest from global investors. A source close to the development said that while foreign borrowings are more expensive due to taxes and hedging costs, they are expected to become an important part of Piramal’s strategy. The company’s average borrowing cost is around 8.8%.

Benchmark Issue

This bond issue will serve as a benchmark for Piramal, with market response and pricing to be determined as the roadshow progresses.

Company Merger

Piramal Enterprises is merging with its subsidiary Piramal Capital and Housing Finance, renaming it Piramal Finance. The company is accelerating the rundown of its legacy wholesale book, reducing legacy AUM by 22% from ₹18,693 crore to ₹14,572 crore between Q3 and Q4 of FY24, now at 20% of the AUM.