Piramal Enterprises to raise Rs 2,750 cr via bond issue

Piramal Enterprises said on Wednesday that it will raise up to Rs 2,750 crore by issuing bonds.

The company's announcement comes close to the date by when the group needs to pay ASAN Corporate Solutions' debt of Rs 1,350 crore and Rs 1,683 crore as its contribution for the rights issue.

The company on Wednesday informed the bourses the board meeting has been scheduled on Saturday "to consider and approve the issue of secured non-convertible debentures on private placement basis amounting up to Rs 2,750 crore in one or more tranches from time to time".

ICRA had in April-2019 put the Piramal Enterprises Ltd rating on 'Negative Outlook' and

downgraded Piramal Capital Housing Finance Ltd (PCHFL) to 'AA/Negative/A1+' from 'AA+/Negative/A1+'.

The rating rationale given was the increasing challenges in resource mobilisation for non-banking financial companies (NBFC) and housing finance companies (HFC), including Piramal Capital and Housing Finance Ltd (PCHFL).

ICRA said that "these challenges stem from the current operating environment and the risk averse sentiment of investors towards non-banks, particularly wholesale-oriented financiers. PCHFL has witnessed increase in its cost of borrowing, in line with the trend observed in the sector, during recent months, along with shortening of tenor for its commercial paper (CP) borrowings".

The resilience of PCHFL's business model to such external shocks will depend on its ability to raise long-term funding and infusion of fresh equity, the rating agency said.

"The outlook on the long-term rating continues to remain negative given its predominantly wholesale book, with large-sized exposures, particularly in the real estate and infrastructure segment," it added .