S&P Global Ratings has upgraded Biocon Biologics’ long-term issuer credit rating to ‘BB+’ from ‘BB’, revising the outlook to “Stable.” This positive shift follows Biocon’s recent equity issuance, which settled compulsorily convertible preference shares (CCPS) issued to Viatris Inc. The upgrade reflects Biocon’s simplified capital structure and expected earnings growth supported by new product launches and favorable industry trends. S&P anticipates Biocon will sustain its improved financial position.
Rating Upgrade Details
Biocon Biologics Limited (BBL), a subsidiary of Biocon Ltd., announced that S&P Global Ratings upgraded its long-term issuer credit rating to ‘BB+’, previously rated ‘BB’. The outlook is now “Stable.” The rating on senior secured notes issued by Biocon Biologics Global PLC was also upgraded to ‘BB+’. This announcement was made on January 28, 2026.
Rationale for the Upgrade
The upgrade is attributed to Biocon simplifying its capital structure by reducing outstanding structured debt liabilities. A US$1 billion CCPS issued to Viatris has been removed through a mix of equity share swaps and cash consideration, funded by approximately US$460 million in fresh equity raised earlier in January 2026.
Financial Outlook and Expectations
S&P anticipates that Biocon’s earnings will grow steadily over the next 12-24 months, driven by increasing demand for generics and biosimilars in key international markets and new product launches. This growth is expected to help the company maintain its improved financial position. S&P expects the pharmaceutical sector to experience healthy growth through 2027, particularly in GLP-1s and treatments for oncology and rare diseases.
Financial Policy and Debt Management
Biocon’s management is committed to returning the balance sheet to pre-acquisition levels of Viatris’ biosimilars portfolio. The acquisition, completed in November 2022 for US$3.3 billion, increased the group’s debt-to-EBITDA ratio to approximately 7x in fiscal 2024 from around 2x in fiscal 2022. The company’s financial policy is expected to underpin its credit strength moving forward.
S&P Projections
S&P anticipates Biocon’s EBITDA to grow to roughly INR45 billion by fiscal 2027, a rise from INR34 billion in fiscal 2025. This is contingent on revenue base expansion and stable EBITDA margins of 22%-23%. The company’s annual capital expenditure is anticipated to remain consistent at INR15 billion-INR20 billion, leading to positive discretionary cash flow through fiscal 2027. The company’s FFO-to-debt ratio is forecast to rise to approximately 30% by fiscal 2027 from approximately 22% in fiscal 2026.
S&P Global’s Base-Case Scenario Assumptions
S&P assumes a limited correlation between the pharmaceutical industry and GDP growth across various markets, noting healthcare policies and regulations have more influence. Biocon’s revenue is expected to increase by 13%-15% in fiscal 2026 and 2027 across segments. The EBITDA margin is projected at 22%-23% over the next three years. Annual capital expenditure of INR18 billion-INR20 billion and annual dividends of INR800 million-INR1.2 billion are also expected.
Source: BSE
