Piramal Capital Launches First Overseas Bond Issue at 7.95%, Targets $300 Million Fundraise

Mumbai: Piramal Capital and Housing Finance is aiming to raise up to $300 million through its first overseas sustainability bond issue. The bonds are priced at 7.95% with a 3.5-year term, slightly better than the initial price guidance of over 8.25%.

Bonds Issued

The bond issue was managed by Deutsche Bank, Barclays, and Standard Chartered as joint global coordinators and joint bookrunners, with Axis Bank, Citigroup, PJSC, and Emirates NBD also serving as joint bookrunners.

Starting on July 12, the company took a cautious approach for its debut overseas bond issue, targeting an initial smaller raise of $300 million. S&P Global Ratings assigned a ‘BB-‘ long-term rating to the issuer.

Successful Pricing

Amrish Baliga, Managing Director at Deutsche Bank Group, India, commented on the successful pricing, stating, “The strong demand for our debut sustainability dollar-bond issuance, exceeding $1 billion, reflects the confidence global investors have in our company’s fundamentals.”

A spokesperson from Piramal did not respond to requests for comment. The Reserve Bank of India (RBI) has been encouraging non-banking financial companies (NBFCs) to seek alternative funding sources beyond domestic banks. Currently, most of Piramal’s ₹55,000 crore borrowing is domestic, but the company is cautiously adding foreign debt to diversify its borrowing profile.

Diversification

Piramal’s borrowing is diversified across non-convertible debentures (NCDs) and bonds (51%), loans (32%), and pass-through certificates (9%). This overseas bond issue will further diversify its funding sources. The proceeds from the bond issue will be used to expand Piramal’s retail business, which has grown by 50% annually over the past two years.

Piramal’s average borrowing cost is around 8.8%. This debut issue will set a benchmark for the company, with market response and pricing to be evaluated as the roadshow continues.