Jubilant Pharmova Ltd. makes a corporate announcement

If the full Rs 800 crore is incremental debt and the proceeds are not used to repay existing borrowings, net debt-to-EBITDA would rise from 1.8x to approximately 2.4x. This is a derived pro forma estimate using the company’s June 30, 2026 net debt of Rs 2,338 crore and reported TTM net debt-to-EBITDA of 1.8x. ^[4]

Leverage impact

• Current position: Net debt was Rs 2,338 crore and net debt-to-EBITDA was 1.8x as of June 30, 2026, on a TTM basis. ^[4]
• Implied TTM EBITDA: approximately Rs 1,299 crore, derived from Rs 2,338 crore divided by 1.8x.
• Post-raise net debt: approximately Rs 3,138 crore, assuming the entire Rs 800 crore is drawn and retained as debt.
• Pro forma net debt-to-EBITDA: approximately 2.42x, derived from Rs 3,138 crore divided by implied TTM EBITDA of Rs 1,299 crore.
• Change: roughly 0.62x, or about 34%, higher than the current 1.8x.

The impact would be lower if the NCD proceeds refinance existing borrowings, replace project-related liabilities, or are offset by cash generation. The board resolution permits the issue in tranches and allows the funds to be used for purposes including capex, refinancing, working capital and strategic initiatives; it does not require the entire Rs 800 crore to be raised immediately. ^[2]

Alignment with management’s leverage guidance

Management previously stated that net debt-to-EBITDA would “remain range bound”, after rising from 1.5x at March 31, 2026 to 1.8x at June 30, 2026. ^[5] However, the cited guidance does not specify a numerical ceiling or floor, so compliance with a precise leverage threshold cannot be confirmed.

The issuance is therefore:

• Consistent with the broad “range-bound” framing only if the company uses part of the proceeds for refinancing or funds EBITDA growth alongside the investment.
• Potentially above a 2.0x threshold if such a threshold was intended, because the fully incremental pro forma ratio is approximately 2.4x; no 2.0x threshold is stated in the cited management commentary.
• Not fully aligned with the longer-term Vision 2030 objective of zero net debt by FY30 unless the borrowing is temporary and followed by deleveraging. ^[6]

Key caveat: The Rs 800 crore is an approved issuance size, not necessarily the final amount drawn. The actual leverage outcome depends on issuance proceeds, refinancing of existing debt, cash balances, capex deployment and EBITDA recovery.

The annual report does not state a single consolidated weighted-average borrowing rate. Using the FY26 consolidated numbers, the best reported-data proxy is 8.03%:

• Long-term borrowings, including current maturities: Rs 3,057 Crores at 31 March 2026 versus Rs 2,218 Crores at 31 March 2025 ^[7].
• FY26 finance costs: Rs 211.8 Crores ^[8].
• Derived proxy: Rs 211.8 Crores ÷ average long-term borrowings of Rs 2,637.5 Crores = 8.03%.

This is an all-in proxy, not a pure long-term debt coupon, because finance costs are reported at the consolidated level and include the wider financing structure. On a standalone basis, the remaining Rs 50 Crores of long-term NCDs carried a 6.65% coupon, which is effectively the standalone contractual weighted rate because it was the disclosed long-term borrowing ^[9][9].

Impact of the proposed NCD issue

The new issue is approved for up to Rs 800 Crores, but its coupon will be determined through the bidding process ^[10][11]. Assuming the full amount is issued and remains outstanding for a full year:

FY26 interest coverage was reported at 6.3x ^[12]. Mechanically, assuming the earnings numerator remains unchanged, the additional NCD interest would reduce coverage to approximately:

• 5.04x at a 6.65% coupon.
• 4.83x at an 8.03% coupon.

Therefore, the issue is not large enough to make interest coverage immediately weak on this static calculation, but it would add roughly one-quarter to one-third to the FY26 finance-cost base. The actual impact will depend on the final coupon, the amount allotted, drawdown timing, and whether the proceeds refinance higher-cost debt.