Piramal Enterprises Plans To Raise Rs 5,000 Crore From Overseas Investors, Rights Issue
Piramal Enterprises plans to raise Rs 5,000 crore from overseas investors for financial services business.
Piramal Enterprises Ltd. plans to raise up to Rs 5,000 crore for its financial services business as its increases it focus on the housing segment, at least three bankers involved in the transaction told BloombergQuint on the condition of anonymity.
Billionaire Ajay Piramal-controlled group will raise about $500 million (over Rs 3,250 crore) through a compulsory convertible debenture issue from overseas investors, the bankers said. The issue is expected to be launched in a week’s time, they said. After the debenture issue, Piramal Enterprises may also consider a rights issue to raise over Rs 1,600 crore, the bankers added.
The group recently forayed into housing finance as it bets on growth for home and construction loans in Asia’s third largest economy. The company had informed stock exchanges earlier that a board meeting will be held on October 12 to consider “various fund raising options” and “pricing of any securities proposed to be allotted”, among other agenda items.
Investor appetite for the proposed debenture issue has been strong, indicated one of the bankers quoted above. The company has already received commitments of over $500 million from foreign institutional investors and overseas pension funds, he said.
The debentures can be converted any time after 18 months of issuance and will be priced close to the current market price of Piramal Enterprises’ shares, the banker said. It will carry a coupon close to that of the 10-year government bond, payable till the conversion.
The rights issue may be priced at a 10-15 percent discount to the market price, the bankers said.
Kotak Investment Bank, Citigroup and Morgan Stanley are said to be the advisers to the transaction. BloombergQuint’s emails to banks and Piramal Enterprises remained unanswered.