Shapoorji Pallonji Group kicks off $2.7 billion Eqyizen refinancing with rupee bond sales to Farallon, Davidson Kempner and Cerberus
Shapoorji Pallonji Completes Rupee Bond Allocation for $2.7 Billion Refinancing
The Shapoorji Pallonji Group has kicked off a planned 255-billion-rupee ($2.7 billion) refinancing with the sale of local-currency bonds, according to people familiar with the matter, allaying concerns over looming debt repayments.
Bond Issuance and Investor Allocation
One of the group's subsidiaries will issue about 150 billion rupees worth of rupee-denominated bonds to a group of investors including Farallon Capital Management, Davidson Kempner Capital and Cerberus Capital Management, according to the sources who requested anonymity. The funds will be used to refinance debt at unit Goswami Infratech Pvt.
The allocation marks a key milestone in the group's efforts to stabilize its balance sheet through private credit markets. The bond structure reflects earlier discussions between SP Group and global investors—Farallon was expected to invest at least $300 million in the debt, while Cerberus was in discussions to buy around $150 million, with Davidson Kempner potentially investing as much as $200 million.
Strategic Context: Goswami Infratech and Tata Sons Collateral
Goswami Infratech, the group's real estate and civil engineering arm, had debt of about Rs 14,300 crore as of June 2023. The current refinancing represents part of the group's broader effort to extend maturity dates and reduce immediate repayment pressure on existing high-yield notes.
The bonds offer a yield of 18.95% and are secured against SP Group's stake in Tata Sons held through subsidiary Cyrus Investments. Within 18 months of issuance, Tata Sons must either list or SP Group must be able to sell the shares privately at a mutually agreed price. The time-bound liquidity requirement is intended to provide investors with greater certainty about collateral realization.
Refinancing History and Market Conditions
Goswami Infratech's fundraising plans have been delayed, partly due to a surge in rupee hedging costs, forcing the company to seek a two-month extension on repayment of high-yield debt from its original April 30 maturity. The company raised 143 billion rupees through a bond issue in June 2023, with marquee foreign investors participating. The planned debt raise will refinance those notes.
The group aims to complete the deal before end of next month, following the July 9 announcement of bond allocation. The successful placement reflects investor appetite for high-yield private credit backed by tangible collateral, even in a cautious credit environment.
About Shapoorji Pallonji Group
Since its inception in 1865, the group has been committed to creating structures and providing solutions that have a lasting impact on society, using what it knows best: engineering. The group operates through more than 15 companies, employs over 33,000 personnel, and conducts business in over 40 countries, delivering end-to-end solutions across its six core segments. These segments include engineering & construction, infrastructure, real estate, water, energy and financial services.
The company is known for building some of Mumbai's landmarks around the Fort area, including the Hong Kong Bank, Grindlays Bank, Standard Chartered Bank and Reserve Bank of India building, Bombay Stock Exchange building and Taj Intercontinental. In recent decades, the group has executed over 190 marine projects worldwide and developed approximately 16 million square feet of real estate in India.
The group is the second-largest shareholder in Tata Sons, the holding company of the Tata group. The Mistry family holds an 18.4% stake in Tata Sons, positioning itself as the largest individual shareholder in the Tata conglomerate.