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Torrent Pharma lines up mega $1.4 billion acquisition-funding bond sale, bankers say
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India’s Torrent Pharmaceuticals is set to raise up to 125 billion rupees ($1.4 billion) through short-duration bond sales in January, in one of the latest acquisition-funding deals, two bankers said.
The issuance is expected to span maturities of one to five years. Torrent also plans to raise 15 billion rupees via commercial paper to fund its acquisition of a controlling stake in JB Chemicals & Pharmaceuticals.
“The company is in the process of finalising rates and the allocation of quantum for each maturity, and once these things are finalised, they would open the issue for bidding on the electronic platform,” one of the bankers said.
With no new catalysts, India bonds stay flat as traders brace for supply
Indian government bonds saw little movement as traders awaited Friday’s debt sale, despite the Reserve Bank of India’s substantial bond purchases. Concerns over hefty supply persist, even as the market anticipates potential inflows from Indian bonds’ inclusion in the Bloomberg Aggregate Index next week. Overnight swap rates showed mixed trading.
Torrent Pharma did not reply to a Reuters email seeking comment. The bankers requested anonymity as they are not authorised to speak to media.
The bond issue has been rated AA+ by India Ratings and Research, which said the deal will lift Torrent Pharma’s ranking in the domestic market to fifth from seventh by market share.
Torrent has agreed to acquire a controlling stake in JB at an equity valuation of about 257 billion rupees on a fully diluted basis, to be followed by a merger of the two companies.
The bond sale would be the largest rated fund-raising so far this financial year, which runs from April to March, extending a trend of acquisitions being financed through domestic bond markets. JSW Group raised 70 billion rupees via zero-coupon bonds in September to fund the purchase of up to a 75% stake in the Indian unit of Dutch paint maker Akzo Nobel.
Two Jubilant Bhartia Group subsidiaries raised a combined 56.50 billion rupees through zero-coupon bonds in June to fund the acquisition of a 40% stake in Hindustan Coca-Cola Holdings.
($1 = 89.9170 Indian rupees)
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