Torrent Pharmaceuticals Ltd. expects to recover its investment in JB Chemicals & Pharmaceuticals Ltd. within 2.5 years from the point of taking control, which is expected between January and March 2026, executives said during an investor call detailing the company’s largest-ever acquisition. The executives said the transaction will be primarily debt-funded, with Torrent targeting a cost of borrowing below 8%.
“If FY27 I am between let’s say 1.8 to 2.8 [times net debt/EBITDA], let’s take a mid number of 2.5, then I should be able to repay the debt in maybe 2.5 years’ time, so it’s quite comfortable for me.”
The deal includes a ₹11,917 crore cash purchase of a 46.39% stake, a mandatory tender offer for an additional 26%, and an intent to acquire 2.8% from JB employees. Torrent expects to reach a peak leverage of 2.8x by FY27 in a worst-case scenario, but anticipates reducing it to below 0.5x within two years post-merger.
“We have multiple funding options, including corporate loans and capital market instruments,” said CFO Sudhir Menon. “The balance sheet is strong, and we don’t foresee the need to tap our approved QIP route.”
Comfortable leverage
Torrent is evaluating both corporate loans and non-convertible debentures (NCDs), with a preference for instruments that offer long tenures and competitive rates. The company expects sub-8% cost of debt as manageable, especially given the projected cash flows and EBITDA accretion.
“We’re comfortable with the debt profile,” Menon said. “Even in the worst-case scenario, we expect to repay the debt within 2.5 years.”
The company has not ruled out equity fundraising but sees no immediate need to tap its previously approved QIP route.
Valuation and strategic fit
The deal values JB Chemicals at an EV/EBITDA multiple of 22x FY26 earnings, which Torrent executives described as “attractive” compared to last year’s market conditions. The acquisition includes high-margin brands in cardiology and nephrology, as well as a promising CDMO (contract development and manufacturing organization) business.
“JB’s portfolio complements ours in areas like nephrology and ophthalmology, where Torrent has limited presence,” said Aman Mehta, Whole-time Director. “The acquisition enhances our reach and opens new growth avenues,” he said.
Torrent expects procurement, SG&A, manufacturing, and distribution synergies to begin flowing from FY26, with full integration benefits post-merger in FY27–28. The merger process, subject to regulatory and shareholder approvals, is expected to take 15–18 months.
“Synergies will be similar to our past acquisitions,” Menon said. “We’ll optimize costs, consolidate manufacturing, and leverage our distribution network.”
While the company does not anticipate major divestments, it acknowledged regulatory uncertainties and brand overlaps.
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