S&P Global Ratings has upgraded Biocon Biologics Limited's long-term issuer credit rating to ‘BB+’ from ‘BB’ and revised the outlook to “Stable”. The rating on the senior secured notes issued by Biocon Biologics Global PLC has also been upgraded to ‘BB+’. This upgrade follows Biocon's recent equity issuance to settle compulsorily convertible preference shares (CCPS) issued to Viatris Inc. Biocon simplified its capital structure by reducing outstanding structured debt liabilities and removing a US$1 billion CCPS through a mix of equity share swaps and cash consideration. The cash payout was funded by approximately US$460 million in fresh equity raised earlier this month. S&P Global cited that new product launches and favorable industry trends will support Biocon's earnings, with the pharmaceutical sector expected to register healthy growth through 2027, particularly for GLP-1s and treatments for oncology and rare diseases. Biocon's management remains committed to reverting its balance sheet position to pre-acquisition levels, aiming to reduce the debt-to-EBITDA ratio. The stable outlook reflects S&P's view that Biocon's earnings will grow steadily over the next 12-24 months due to growing demand for generics and biosimilars in key international markets and new product launches, which will help maintain its improved financial position. The company's FFO to debt ratio is projected to improve to about 30% by fiscal 2027 from less than 10% in fiscal 2025.
