Biocon Biologics' credit outlook positive after accelerated debt reduction

Biocon Biologics Limited, a subsidiary of Biocon Ltd., received a positive outlook on its 'BB' long-term issuer credit rating and 'BB' issue rating on senior secured notes from S&P Global Ratings on December 10, 2025. This decision reflects the company's accelerated debt reduction, driven by Biocon's plan to make Biocon Biologics a wholly owned subsidiary. The transaction involves acquiring approximately 25% of minority investor stakes, including a swap of $1 bn in compulsorily convertible preference shares (CCPS) held by Viatris Inc. for $415m in Biocon equity shares and $400m in cash.

Biocon intends to fund the $400m cash consideration to Viatris through a fresh equity issuance of approximately INR45 bn. This move is expected to materially decrease Biocon's debt by March 2026. Pro forma the transaction, S&P Global Ratings estimates Biocon’s adjusted debt will fall to about INR120 bn by the end of March 2026, a significant reduction from INR248 bn as of March 2025.

The CreditWatch resolution is anticipated within 60-90 days, pending clarity on the final capital structure, the completion of the equity issuance by Biocon, and the elimination of other debt-like instruments. This strategic financial restructuring highlights Biocon Biologics' commitment to strengthening its balance sheet and enhancing financial stability.