Piramal Finance plans up to $500 million debut dollar-bond issue

India’s Piramal Capital and Housing Finance is planning its maiden dollar-bond sale as tighter regulations by the nation’s central bank stifle domestic funding sources for shadow lenders, according to people familiar with the matter.

Billionaire Ajay Piramal’s firm is in talks with a group of global investment banks to raise $300 million to $500 million via such notes with a tenor of three to five years, the people said, asking not to be identified as the discussion are private.

The proposed offering follows a rule change by the Reserve Bank of India in November to check a runaway rise in risky debt, making it costlier for shadow lenders to get bank loans. The move has been prompting non-bank finance companies to tap alternatives in the credit market to fund their loan growth.

The company, a part of conglomerate Piramal Group, provides real estate lending, housing finance and corporate lending across sectors, according to its website.

Proceeds from its bond sale would primarily be used for lending onshore, said one of the people, without giving further details.

A spokesperson for the Piramal Group declined to comment.