Piramal Capital & Housing Finance raised its maiden dollar syndicated social loan of $100 million (₹835 crore). The entire loan is pre-funded by Standard Chartered Bank and the foreign lender is expected to syndicate the loan in the next few months.
The loan has a three-year maturity, and it is benchmarked to the three-month secured overnight financing rate (SOFR) plus 200 basis points. The prevailing SOFR is 5.3%. “Through this loan, we are trying to tap the overseas market and since a large part of our financing gels well with the social theme, this loan is the first of many to come,” a Standard Chartered Bank official said on condition of anonymity. “All highly-rated NBFCs have to start looking at some amount of financing from the international markets and this route is expected to pick up pace. In fact, there is a lot of global investor appetite for ESG space.”
Standard Chartered Bank is the social loan coordinator for this transaction and the sole mandated lead arranger, underwriter and book-runner.
Social loans are used to fund projects that have a social cause, like a welfare project, affordable homes or environmentally sustainable projects among others.
The fund raised is a secured term loan, and the proceeds will be used for lending in affordable housing, MSME business loans, priority sector loans, microfinance loans and other eligible products as per the sustainable finance framework.
“We largely cater to the Bharat market with a considerable affordable housing portfolio, along with our focus on loans to women entrepreneurs; this ESG loan will go well with our business focus,” said the official cited above.
Last month, Shriram Finance raised more than $450 million through a syndicated term loan. The funds were raised as a social loan to empower small entrepreneurs and vulnerable groups across India.
Piramal Finance has a customer base of 4.1 million. Its assets under management (AUM) in the retail business recently crossed ₹50,000 crore, driven by strong growth in mortgages, unsecured loans, and used car loans.
Mortgage loans, comprising home and small business loans, account for 68% of the overall retail AUM. Such loans grew at a robust 38% in FY24. The lender expects 15% AUM growth in FY25 to around ₹80,000 crore. It also has plans to expand the retail business to 75% of the total book, with wholesale lending forming the rest 25%. As of March-end, the retail book accounted for 70% at about ₹48,000 crore and the wholesale book at 30%.
