Piramal Finance raises Rs 2,300 crore via external commercial borrowing

Non-banking finance company Piramal Finance has raised $265 million (around Rs 2,300 crore) via the external commercial borrowing (ECB) route, the company said on Thursday.

 

The ECB facility saw strong participation from four multinational banks — Abu Dhabi Bank, Standard Chartered Bank, Sumitomo Mitsui Banking Corporation (SMBC), and the Hongkong and Shanghai Banking Corporation (HSBC).

 

The facility carries a tenor of three years and is fully hedged, ensuring mitigation of foreign exchange and interest rate risks, the press release added. Additionally, the deal includes a greenshoe option of $300 million.

 

Piramal Finance in FY25 raised a total of $815 million to support its growth ambitions.

 

 

“As we expand further into semi-urban and developing cities, our focus remains on enhancing access to affordable credit for underserved communities,” said Jairam Sridharan, managing director, Piramal Finance. “Over the next 2–3 years, we aim to source 10–12 per cent of our borrowings from international markets, providing global investors an opportunity to participate in India’s growth story,” he added.

 

The fundraising is aimed at expanding the company’s lending portfolio, focusing on affordable housing and financial inclusion across Tier-II and Tier-III cities.

 

In November 2023, the Reserve Bank of India had increased risk weights for bank loans to non-banking finance companies (NBFCs), prompting the shadow banks to diversify their funding sources beyond traditional bank loans. This regulatory push led NBFCs to explore other financing avenues, including the domestic and overseas bond markets. As a result, major NBFCs such as Shriram Finance, Manappuram Finance, Muthoot Finance, and Tata Capital, among others, have tapped the overseas capital market for funds in FY25. The regulator restored the risk weights in late February, which came into effect from April 1.