MUMBAI: Piramal Capital & Housing Finance is raising up to Rs 3,000 crore through an issue of bonds offering interest at 9.25% per annum. The issue comes at a time when the company has proposed to merge troubled home loan provider Dewan Housing Finance (DHFL) with itself.
The bonds are rated AA by CARE agency and come with the assurance that, should the rating fall by even one notch to AA-, the coupon rate would stand increased by 0.50%. For every notch of rating downgrade thereafter, the coupon would be increased by 0.50% per notch. If the long-term credit rating of the non-convertible debentures (NCDs) is downgraded to A- or below, the holders would reserve the right to recall the outstanding principal amount.
Last month, Piramal Group had announced that it had received the RBI’s clearance for its Rs 34,250-crore acquisition of DHFL. The group had also said that it would merge DHFL with Piramal Capital & Housing Finance once the same is approved by the NCLT. Further, the group had promised to invest Rs 10,000 crore of Piramal Capital’s equity in the merged entity.
The bond issue is slated to complete this week through the book-building process. They are in the nature of debentures that are secured, redeemable, non-convertible, and listed on the stock exchanges. The issue size has been fixed at Rs 2,000 crore with an option to retain over-subscription of Rs 1,000 crore.
The bonds will be issued after approval by the company board in their meeting on March 18. The committee of directors has already approved the issue in their meeting on March 10.
Piramal Capital & Housing Finance (formerly Piramal Housing Finance) was incorporated in 2017 as a wholly owned subsidiary of Piramal Enterprises. With effect from March 2018, Piramal Finance and Piramal Capital were amalgamated with Piramal Housing Finance.