Sun Pharma misses debt fundraise goal as investors demand higher yields, bankers say

Sun Pharmaceutical Industries raised 78.16 billion rupees through two bond offerings, below its 100 billion rupee goal, Business Recorder reported on Thursday, citing three merchant bankers. Investors sought higher yields, while the company accepted bids of 20.03 billion rupees for the first tranche and 58.13 billion rupees for the second.

The five-year bond tranche carried an 8.20% annual coupon, while the other bond, with a put option after 17 months, offered 8.05%. Saurav Ghosh of Jiraaf attributed the fundraising gap mainly to pricing conditions rather than doubts about Sun Pharma’s credit quality, noting that the spread between sovereign and top-rated corporate debt had narrowed as India’s 10-year bond yield exceeded 7.4%.

Sun Pharma plans to use the proceeds to partly repay a bridge loan taken to finance its acquisition of US healthcare company Organon & Co. The company had targeted 30 billion rupees from the shorter tranche and 70 billion rupees from the five-year issue.