Torrent secures ₹20,000 crore credit line for JB Chemicals buyout

Ahmedabad-based Torrent group has secured a credit line of up to ₹20,000 crore from a consortium of international lenders, including HSBC, Standard Chartered Bank, and Barclays, to fund its proposed acquisition of JB Chemicals & Pharmaceuticals Ltd., according to a person familiar with the matter.

 

Torrent is acquiring a 46.39 per cent stake in JB Chemicals from KKR & Co. for about ₹11,917 crore, and an additional 2.8 per cent stake from employees for roughly ₹719 crore, both at ₹1,600 per share.

 

A large number of Indian companies are tapping foreign banks to raise funds to fund acquisitions. Earlier, the Adani group had tapped foreign banks to fund its $10.5 billion acquisition of Holcim stake in Ambuja Cements.

 

Torrent plans to draw down the facility depending on the subscription to its upcoming open offer, the person said, requesting anonymity. 

 

The interest rate on the credit line has been set at a competitive 8 per cent, the person added.

 

Sudhir Menon, CFO, Torrent Pharma told analysts that they do not have plans for capital raising through Qualified Institutional Placements (QIP) (which the company board had earlier approved for fund-raising purposes).

 

“I should be able to repay the debt in 2.5 years, and that is quite comfortable,” he said. Also the company expects the cost of debt to be lower than 8 per cent, Menon said.

 

Torrent also feels that the merged entity would be EPS accretive in financial year 2027-28, which is the first full year of operations. It expects to take control only in the end of FY26.

 

As per Indian takeover regulations, the transaction triggers a mandatory open offer to acquire up to 26 per cent from public shareholders. Torrent has announced an offer price of ₹1,639.18 a share, implying a potential payout of ₹6,842.8 crore, assuming full acceptance.

 

Shares of JB Chemicals closed 6.64 per cent lower on Monday at ₹1,680 apiece. 

 

A banker said if the market price is above the open offer price then JB Chemicals shareholders won’t tender their shares in the open offer.

 

Barclays and Standard Chartered declined to comment, while an email sent to HSBC remained unanswered.