(Bloomberg) -- The financial unit of Indian billionaire Ajay Piramal's conglomerate is set to sell its biggest-ever bond, and will use the money to partly fund the takeover of failed shadow bank Dewan Housing Finance Corp.
Piramal Capital & Housing Finance Ltd. will raise 20.5 billion rupees ($283 million) on Friday by selling five-year notes at a coupon of 9.25%. A part of the proceeds will be used to pay for Piramal's acquisition of mortgage lender Dewan Housing, according to people with knowledge of the matter, who asked not to be identified.
Piramal won a bidding war for the shadow bank in January, beating out rivals including U.S. alternative investments manager Oaktree Capital. It is seeking to expand its Indian lending operations by winning over more individual customers and diversifying its real estate loan book.
Read more on how shadow lenders spooked markets
A spokesperson for the Piramal group didn't respond to a request for comment. Piramal had signaled earlier this week that it might raise as much as 30 billion rupees in the deal, after already selling 20 billion rupees of notes this month.
“The takeover of Dewan will aid Piramal to grow substantially overnight, which otherwise would have taken many years,” said Hemant Dharnidharka, chief executive officer at Dharni Wealth.
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