Torrent Pharma Eyes ₹12,500 Cr Bond Sale for JB Chemicals Buyout

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AuthorVihaan Mehta|Published at:
Torrent Pharma Eyes ₹12,500 Cr Bond Sale for JB Chemicals Buyout
Overview

Torrent Pharmaceuticals is poised to raise up to ₹12,500 crore via short-duration bonds in January, marking one of the largest acquisition-funding deals. The issuance, spanning one to five years, alongside ₹1,500 crore in commercial paper, will finance its acquisition of a controlling stake in JB Chemicals & Pharmaceuticals. The AA+ rated deal is expected to elevate Torrent Pharma's domestic market share ranking.

Mega Bond Sale for Acquisition

Torrent Pharmaceuticals Limited is preparing to tap domestic debt markets for a substantial sum, planning to raise up to ₹12,500 crore through short-duration bond sales in January. This move positions the company to fund its significant acquisition of a controlling stake in JB Chemicals & Pharmaceuticals Limited. Bankers familiar with the process indicated that maturities for the bonds are expected to range from one to five years.

Funding the JB Chemicals Deal

Beyond the bond issuance, Torrent Pharma also intends to raise an additional ₹1,500 crore through commercial paper. These funds are earmarked for the acquisition of a controlling interest in JB Chemicals. Sources close to the matter stated that Torrent Pharma is in the final stages of determining precise rates and the allocation of the fundraising amount across different maturities before opening the issue for bidding on electronic platforms.

Market Impact and Rating

India Ratings and Research has assigned an AA+ rating to the upcoming bond issue, signaling strong creditworthiness. The agency projects that this strategic acquisition and subsequent financing will propel Torrent Pharma's ranking in the domestic pharmaceutical market from seventh to fifth by market share. The total equity valuation for acquiring the controlling stake in JB Chemicals is approximately ₹25,700 crore on a fully diluted basis, which will be followed by a merger of the two entities.

Broader Market Trend

This bond sale is poised to be the largest rated fundraising activity of the current financial year. It continues a discernible trend where major acquisitions are increasingly being financed through India's burgeoning domestic bond markets. Similar large-scale financings have been observed recently, including JSW Group's ₹7000 crore zero-coupon bond sale in September for an Akzo Nobel subsidiary stake and Jubilant Bhartia Group subsidiaries raising ₹6.50 billion in June for a stake in Hindustan Coca-Cola Holdings.

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