Evonile Pharma to use ₹800 crore to repay ICICI Bank loan

In its proposed rights issue, Evonile Pharma Limited (formerly known as Novartis India Limited) plans to allocate ₹800 crore of estimated net proceeds to repay or prepay an ICICI Bank loan used to acquire a cardiology medicine brand. The issue could raise ₹884.754 crore in gross proceeds if fully subscribed and all call money is received.

How large is Evonile Pharma's proposed rights issue?

Evonile Pharma proposes to issue up to 1,02,87,832 partly paid-up Rights Equity Shares at ₹860 each, comprising a ₹5 face value and ₹855 premium, for gross proceeds of up to ₹884.754 crore. Its board authorised the rights issue on October 8, 2026, and the Rights Issue Committee approved its terms, including the issue price, on November 4, 2026.

Applicants must pay ₹645 per Rights Equity Share on application, equal to 75% of the ₹860 issue price. The remaining ₹215 per share, or 25%, will be payable through one subsequent First and Final Call, whose timing and terms may be decided by Evonile Pharma's board.

The ₹860 issue price is below the ex-rights price of ₹1,780.25 stated for the National Stock Exchange and ₹1,646.71 stated for BSE. The offer document identifies the National Stock Exchange as having the highest trading volume during the 60 trading days preceding the November 4, 2026 Rights Issue Committee meeting.

What ICICI Bank borrowing does Evonile Pharma intend to repay?

Evonile Pharma intends to use up to ₹800 crore from net proceeds to repay or prepay its identified ICICI Bank borrowing, along with accrued interest and any applicable penalty. The company reported ₹800 crore outstanding under the facility as of September 30, 2026, but the proposed allocation also covers accrued interest, so the document does not state that all principal will necessarily be repaid.

ICICI Bank sanctioned a ₹800 crore corporate secured rupee term-loan facility through a credit arrangement letter dated August 21, 2026 and a facility agreement dated August 29, 2026. Evonile Pharma drew the full amount on September 5, 2026 to acquire a brand in cardiology medicine.

The loan is secured by a first charge on current assets and the acquired brand intangible asset. The facility specifies a 0.25% per annum prepayment charge, although the offer document says no prepayment charge applies when repayment occurs within 12 months of the first drawdown date; Evonile Pharma also reported no delays, defaults, rescheduling or restructuring on this borrowing.

How will Evonile Pharma allocate the rights issue proceeds?

Evonile Pharma estimates net proceeds of ₹879.404 crore after ₹5.35 crore of estimated issue-related expenses. Of that amount, ₹800 crore is proposed for the identified borrowing and up to ₹79.404 crore for general corporate purposes, which the document says will remain within 25% of gross proceeds.

At the application stage, Evonile Pharma expects to deploy ₹600 crore toward debt repayment or prepayment and ₹58.215 crore toward general corporate purposes in Financial Year 2027. The source identifies a remaining estimated deployment of ₹221.188 crore after receipt of First and Final Call money, making full deployment dependent in part on collection of that call.

The ₹79.404 crore general-corporate allocation may fund strategic initiatives, growth opportunities, marketing, brand building, capital expenditure, approval-related payments, administrative costs and contingencies. Management retains flexibility over this allocation, while any difference between the estimated ₹5.35 crore issue expenses and actual expenses will adjust the general-corporate amount.

Professional and intermediary fees account for ₹3.86 crore, or 72.2%, of the ₹5.35 crore estimated issue expenses. Regulatory fees, including fees for depositories, stock exchanges and the Securities and Exchange Board of India, are estimated at ₹0.85 crore, while advertising and shareholder outreach are estimated at ₹0.20 crore.

When will Evonile Pharma deploy the proceeds and how will use be monitored?

Evonile Pharma proposes to deploy the entire net proceeds in Financial Year 2027, based on the schedule approved by its board on November 4, 2026. The company says the timing is based on management estimates, business plans and commercial conditions, and has not been appraised by a bank, financial institution or independent agency.

If capital raised is lower than required or the estimated cost of the objects increases, Evonile Pharma says it may use internal accruals or seek further borrowing from existing or future lenders. The board or Rights Issue Committee may also revise the timing, manner or allocation of deployment if call money is delayed, not received, or business requirements change.

CARE Ratings Limited has been appointed to monitor utilisation of gross proceeds, which Evonile Pharma will place in a separate bank account. The monitoring agency's reports will be placed before the board until 100% of gross proceeds are utilised, while quarterly statements on use and deviations will be submitted to the Audit Committee and stock exchange.

The issue is not underwritten, but the promoters and promoter group have indicated that they intend to subscribe to their rights entitlements and may apply for unsubscribed shares, subject to a stated 74% aggregate ownership limit. Because the object includes repayment of borrowing used for a cardiology-brand acquisition, the issue is subject to a minimum subscription requirement of 90% of the Rights Equity Shares offered.

Conclusion

Evonile Pharma's proposed ₹884.754 crore rights issue is primarily intended to refinance borrowing incurred for a cardiology medicine brand acquisition. The ₹800 crore loan allocation is substantially larger than the ₹79.404 crore earmarked for general corporate purposes, while the transaction uses a partly paid structure that initially collects 75% of the ₹860 issue price.

The next disclosed event is the board's determination of the ₹215 First and Final Call, which affects receipt of the remaining proceeds and the stated ₹221.188 crore later deployment. Investors can also watch Financial Year 2027 utilisation disclosures and CARE Ratings monitoring reports, as Evonile Pharma has said it may alter the deployment schedule if call collections or business conditions change.