The roadshow began on July 12 with the company looking to do a smaller raise of $300 million initially, adopting a conservative approach, being the first-time issuer of bonds overseas. S&P Global Ratings has assigned a ‘BB-‘ long-term rating to the issuer.
“This successful pricing of our debut sustainability dollar-bond issuance is a testament to the confidence global investors have in the company. The demand for the issuance, which exceeded $1 billion, underscores the market’s belief in the group’s strong fundamentals,” said Amrish Baliga, Managing Director at Deutsche Bank Group, India.
A Piramal spokesperson did not respond to requests for comment.
The Reserve Bank of India’s (RBI’s) has been asking NBFCs to seek alternative funding beyond domestic banks. Currently, most of Piramal’s Rs 55,000 crore borrowing is domestic, but the company is cautiously adding foreign debt to its portfolio to diversify the borrowing profile.
Piramal’s borrowing is diversified across NCDs, 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 in expanding Piramal’s retail business, which has expanded by 50% annually over the past two years. While the majority of Piramal’s Rs 55,000 crore borrowing is domestic, the company is strategically adding foreign debt to diversify its borrowing profile. The current borrowing mix includes NCDs, bonds (51%), loans (32%), and pass-through certificates (9%). This overseas bond issue will further diversify its funding sources.
Piramal’s average borrowing cost is around 8.8%. The debut issue will set a benchmark for the company, with market response and pricing to be assessed as the roadshow progresses.
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