Jubilant Pharmova plans to raise Rs 800 crore via maiden bond issue

Jubilant Pharmova Ltd, the pharmaceutical arm of the multi-billion dollar chemicals-to-quick service restaurants conglomerate Jubilant Bhartia Group, is raising Rs 800 crore in fresh debt through its maiden bond issue in the local market, according to people familiar with the matter.

The funds include a base issue of Rs 400 crore and an equal greenshoe option, and they are likely to be used for the company’s capital expenditure purposes and future expansion plans, the people said.

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“This is the first time the company is tapping the local bond market. The bonds will carry a tenure of three years and the indicative pricing for the securities is around 8.50%,” said one of the persons, who did not wish to be identified.

The bonds are likely to be subscribed to mostly by mutual funds and asset managers, as they are likely within their maturity range. The book-building and final bidding for these bonds are likely to take place later this week. A company spokesperson did not reply to an email seeking comment. A spokesperson from Axis Bank the sole banker to the issue, declined comment.

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For April-June, the company had reported a 45% year-on-year decline in consolidated profit to Rs 56 crore, mainly on account of a fall in earnings before interest, taxes, depreciation and amortisation (Ebitda) due to the unavailability of single-photon emission computed tomography (SPECT) radiopharmaceutical products and higher operating expenses.

Last month, credit rating agency ICRA assigned an AA+ rating to the Rs 1,400 crore debenture programme, citing the company’s diversified revenue profile, presence across niche segments with healthy profitability and financial flexibility on account of being part of the Jubilant Bhartia Group.