Torrent Pharma plans Rs 14,000 crore bond sale for JB Chemicals acquisition

Mumbai: Torrent Pharmaceuticals is lining up a ₹14,000-crore bond sale to finance its bid for JB Chemicals & Pharmaceuticals, people familiar with the matter told ET. This marks one of the largest sponsor-backed financings in India's pharmaceutical sector this year.

Ahmedabad-based Torrent is in discussions with HSBC, Standard Chartered Bank, and Barclays for the funding package. The company plans to issue non-convertible debentures (NCDs) in the coming weeks and repayment is expected to begin from March 2027, with an average maturity of up to three years.

The bonds will be serviced through internal accruals.


"Bankers are reaching out to investors, and it could be funded shortly," said a debt capital market executive.

The NCDs will be priced around 7.5%, added the executive cited above. The bonds are rated AA+. Such corporate bonds are priced at a 150-175 basis points spread to corresponding g-sec.

The proposed merger is awaiting approvals from the Competition Commission of India (CCI), soon followed by National Company Law Tribunal (NCLT), and other regulators.

Torrent's acquisition plan involves purchasing 46.39% of JB Chemicals' equity held by KKR, along with 2.41% from employees. A share purchase agreement has already been signed for the latter, which forms part of the 2.8% stake owned by certain employees. The total acquisition value is estimated at ₹12,532 crore, largely funded through debt.

The transaction also triggers a mandatory open offer to acquire up to 26% of JB Chemicals' equity from public shareholders at ₹1,639.18 per share, which is about ₹6,843 crore.

Following the acquisition, Torrent plans to merge JB Chemicals with Torrent Pharmaceuticals (TPL) through a scheme of arrangement, under which JB shareholders would receive 51 fully paid-up equity shares of TPL for every 100 shares held in JB.

"While the transaction is expected to be largely funded through debt, the quantum of debt to be undertaken by Torrent will depend upon the extent of subscription to the open offer," said Icra in a recent report. Torrent Pharma will raise funds through a qualified institutional placement (QIP), if required.

Emails sent to Torrent, HSBC, Standard Chartered, and Barclays seeking comment did not elicit a response.

While global banks, mutual funds, AIFs and NBFCs have so far supported debt financing for transactions such as Mankind Pharma's acquisition of Bharat Serums and Vaccines, Nirma's purchase of Glenmark Life Sciences, the Reserve Bank of India has recently issued draft guidelines to allow banks to fund corporate acquisitions. Until now, such activity had been largely off-limits to banks under existing RBI rules, leaving private credit funds and mutual funds to dominate the space, which will change soon.