Piramal Finance to Raise ₹150 Billion via NCDs by March 2027

Piramal Finance Announces Major Fundraising Initiative

Piramal Finance, a prominent non-banking financial company (NBFC) in India, has announced a significant plan to bolster its capital base. The company's board has approved a proposal to raise up to ₹150 billion (approximately $1.58 billion) through the issuance of non-convertible debentures (NCDs). This fundraising will be conducted in one or more tranches over the next fiscal year, from April 1, 2026, to March 31, 2027. The move is aimed at securing long-term funding to support the company's growth trajectory and meet its corporate requirements.

Details of the NCD Issuance

The debentures are proposed to be listed on either the BSE, the National Stock Exchange of India (NSE), or both, ensuring liquidity for investors. While Piramal Finance has outlined the total amount and timeline, further details such as the specific tenure of the debentures and the interest rates offered have not yet been disclosed. This fundraising is a key component of the company's broader financial strategy, which includes an annual borrowing target of ₹30,000 crore. The NCD issue will help finance onward lending, refinance existing debt, and support the company's expanding operations.

Strategic Importance of Credit Rating Upgrade

A pivotal development supporting this fundraising plan is the recent upgrade of the company's long-term debt rating to 'AA+/Stable' by CRISIL. This improved credit rating is expected to be a significant advantage, potentially lowering Piramal Finance's cost of borrowing by 50 to 80 basis points. According to management, as the company replaces its existing debt with new borrowings, the benefits of the higher rating will materialize, enhancing profitability. This upgrade reflects the company's strengthening financial position and improved asset quality, boosting investor confidence.

A Diversified and Cost-Effective Borrowing Mix

Piramal Finance is actively managing its borrowing mix to optimize costs. The company has indicated a strategic preference for domestic funding channels, including bank loans and local bonds, which have proven more cost-effective than dollar-denominated bonds in the current market environment. Bank loans are expected to constitute about 40% of its planned borrowings. However, the company continues to tap international markets opportunistically. It aims to increase its borrowing from international sources from the current 4% to between 10% and 12% over the next two to three years.

Recent International Fundraising Success

This NCD plan follows a series of successful capital-raising activities from global institutions. Recently, Piramal Finance secured $150 million in long-term funding from the International Finance Corporation (IFC) and the Asian Development Bank (ADB). The company is also in talks to raise an additional $150 million, which would bring its total funding from multilateral agencies to $100 million by the end of FY26. In the previous fiscal year (FY25), the company raised $115 million through External Commercial Borrowings (ECBs), diversifying its liability profile.

Fueling Ambitious Growth Targets

The capital raised will be instrumental in achieving Piramal Finance's ambitious growth objectives. The company aims to surpass ₹1 trillion in Assets Under Management (AUM) and has a strategic goal to double its retail loan AUM by FY28, which has already crossed the ₹50,000 crore mark. The funds will be deployed to expand access to credit in key focus areas, including affordable housing finance and MSME lending. A significant emphasis is placed on serving customers in Tier 2 and Tier 3 markets, including women entrepreneurs, thereby contributing to financial inclusion.

Financial Performance and Market Position

The company's consistent financial performance provides a solid foundation for its growth plans. For the first nine months of FY2026, Piramal Finance reported a Profit After Tax (PAT) of ₹1,004 crore, demonstrating steady profitability. Management has highlighted an encouraging consistency in its financial numbers over recent quarters. This stability, combined with strategic monetization of non-core assets, such as the stake in Shriram Life Insurance for ₹600 crore, further strengthens its capital position.

Conclusion: A Forward-Looking Financial Strategy

Piramal Finance's plan to raise ₹150 billion via NCDs is a well-timed and strategic move. It leverages a favorable credit rating to secure capital at a lower cost, supporting its diversified borrowing strategy. By balancing domestic and international funding sources, the company is positioning itself to effectively finance its aggressive growth targets in the retail and MSME sectors. This proactive approach to capital management is set to reinforce its market position and drive sustainable growth in the coming years.