Piramal Finance Diversifies with Strategic $1 Billion Foreign Borrowing Plan

Piramal Finance intends to borrow USD 1 billion annually from foreign sources to diversify funding. It has raised USD 350 million from IFC and ADB, with plans for another USD 150 million from a multilateral agency. The company aims for 12-15% foreign source liabilities annually.

Piramal Finance is set to make a significant move in the financial sector by borrowing up to USD 1 billion each year from international sources. This strategic decision is part of the company's broader plan to diversify its funding sources, a strategy engineered under the leadership of Chief Executive and Managing Director, Jairam Sridharan.

The firm has successfully raised USD 350 million from International Finance Corporation (IFC) and Asian Development Bank (ADB), and discussions are underway to secure an additional USD 150 million from an unnamed multilateral funding agency in the coming weeks. This initiative underscores the firm's commitment to securing 12-15% of its liabilities from abroad, thereby enhancing its financial resilience.

Piramal Finance aims to continuously raise USD 500 million to 1 billion through various foreign channels each fiscal year. While the latest borrowing costs 8-8.5% in rupee terms, cheaper than the domestic market's 8.75-8.80%, the approach's accretive impact on net interest margins varies. Despite the variability, the strategic diversification of funding sources stands as a cornerstone for Piramal's financial growth trajectory.

(With inputs from agencies.)