Torrent Pharma Raises ₹12,500 cr via Bonds for Buyout of JB Chemicals

Torrent Pharmaceuticals has raised ₹12,500 crore through multiple tenure debentures to fund its acquisition of JB Chemicals & Pharmaceuticals, which was announced in June last year. Mutual funds, insurance companies, and pension funds placed their bids in the electronic system on Friday at yields ranging from 7.20% to 7.80%."The amount was spread across tenures and amounts, starting with ₹1,500 crore raised through a one-year commercial paper. Non-convertible debentures (NCDs) also have also been issued at two-, three-, four-, and five-year tenures with the aggregate amounting to ₹12,500 crore, which will be used to fund the JB Chemicals acquisition," said a person aware of the details.Torrent raised ₹2,000 cr at 7.45% by selling two-year NCDs, ₹2,500 cr at 7.60% from three-year NCDs, ₹3,000 cr at 7.70% from four-year NCDs, and ₹3,500 cr at 7.80% selling five-year NCDs as the company spread over the debt, expecting an improvement in its earnings before interest, tax, depreciation, and amortisation (Ebitda) after the acquisition takes shape.Torrent announced the acquisition of a 46.39% stake in JB Chemicals from private equity firm KKR, along with a 2.41% stake from employees. In November, the company launched an open offer to acquire a 26% stake in JB Chemicals, as it is mandatory whenever a company buys more than 25% stake in a rival. The acquisition needs approval from the NCLT.In a rating note earlier this month, India Ratings and Research had assigned an A1+ rating for Torrent, citing augmentation in the company's position in the Indian pharmaceutical market due to the acquisition of JB Chemicals, which will strengthen Torrent's leadership in chronic therapies and expand its footprint in the ophthalmology and Contract Development and Manufacturing Organisation (CDMO) segments.