Mumbai, July 24, 2024: Diversified financial services company Piramal Finance has issued its debut US dollar-denominated bonds in the international markets. This bond marks Piramal Finance's first issuance in the international capital markets, providing the company access to a deep, alternative pool of liquidity to complement funds available through banks and Indian domestic capital markets.
Piramal Finance raised USD 300 million through this issuance. The bonds have been structured as Fixed Rate Senior Secured Sustainability Bonds at a yield of 7.95% for a tenor of 3.5 years. This transaction marks a major milestone in Piramal Finance’s efforts to diversify its borrowing profile.
Jairam Sridharan, Managing Director, Piramal Capital & Housing Finance Ltd, said, “We are delighted to announce the successful USD 300 million maiden fundraise from international bond markets. Over the last few months, RBI has been guiding NBFCs to explore other sources of debt beyond Indian banks. This issuance is our attempt to open a significant new liability pool in alignment with that guidance. The core business of Piramal Finance has been to serve the borrowing needs of the Budget Customer of Bharat. This Sustainability Bond issuance fits perfectly with our mission and our investors’ intent. The resounding success of this bond issuance marks a significant milestone for Piramal Finance and reaffirms our commitment to driving inclusive growth and sustainable development.”
For this strategic fund-raising effort, Piramal Finance engaged with institutional debt investors across Asia, Europe, and the Middle East over the past few weeks. The company also recently received its debut international ratings, a BB- rating from S&P and a Ba3 from Moody’s, both with a stable outlook. This Dollar Bond transaction follows the recently concluded $100 million social impact loan by Piramal Finance with Standard Chartered Bank.
For the USD 300 million issue, the company received a 4X level of demand, with the order book peaking at USD 1.3 billion ahead of the release of final pricing guidance. A total of 113 investors participated in the final issuance, with 81% of the funds raised from Asia and 19% from the Middle East. The deal attracted high-quality demand, with 88% of funds raised from asset managers, 5% from sovereign wealth funds and insurance companies, 4% from private banks, and 3% from banks and others.
The Sustainability Bond issuance is guided by PEL’s Sustainable Finance Framework, which is aligned to the ICMA Social Bond Principles. Proceeds are expected to fund impactful social projects, including affordable housing, MSME business loans, priority sector loans, microfinance, and other eligible products. Standard Chartered Bank, Barclays, and Deutsche Bank acted as Joint Global Coordinators and Joint Bookrunners, along with Axis Bank, Citi, and ENBD as Joint Bookrunners for this transaction.
On the first trading day, i.e, on July 23, the bond performed strongly in the secondary markets, with yields tightening by approximately 15 basis points to 7.80%.
