IndiaRF Fund has borrowed senior debt of ₹700 crore from Axis Bank and used equity and mezzanine debt from its own funds to finance the acquisition of Ind Swift Laboratories’ API business for ₹1,650 crore.
“Axis Bank is providing the senior debt, while IndiaRF Fund is contributing equity and mezzanine debt to facilitate the 100% buyout of the API business,” said a source close to the development. “This transaction shows that banks are comfortable lending to companies that have undergone a change in management, a shift towards lending to previously distressed entities.”
Axis Bank has extended the debt at around three times EBITDA, considering the company’s ₹256 crore EBITDA. Spokespersons Axis Bank and IndiaRF did not respond to requests for comment.
Back in September 2023, IndiaRF had announced its plans to acquire the active pharmaceutical ingredients and contract research and manufacturing services business through Synthimed Labs, its portfolio company, for ₹1,650 crore. On March 18, it concluded the acquisition and paid debt holders.
The sale consideration of ₹800 crore will be used to repay outstanding debt of ₹800 crore and remaining will be the surplus to the company.