Shapoorji Pallonji reduces minimum bond investment to ₹1 crore to broaden investor base
SP Group Cuts Entry Threshold for High-Yield Bonds
Shapoorji Pallonji Group's EquiZen Investments has lowered the minimum investment threshold for its high-yield bonds to ₹1 crore from ₹10 crore, with investors offered yields of up to 17.6 per cent. The move signals an effort to expand the investor base beyond ultra-high-net-worth individuals to a broader pool of wealthy investors.
Previously, wealth managers were pitching the bonds to HNIs and ultra-HNIs with a minimum investment of ₹10 crore and yields of up to 17.8 per cent. The adjusted terms—a lower entry barrier paired with a marginally reduced yield—reflect the issuer's intention to tap greater demand.
Bond Structure and Scale
EquiZen, a wholly owned SP Group promoter entity, has issued ₹21,350 crore of zero-coupon, unlisted, unrated, non-convertible debentures (NCDs) with a three-year tenor and face value of ₹1 crore per unit, with a 12-month make-whole provision. Zero-coupon structure means investors receive interest at maturity rather than through regular payments.
Collateral and Security Package
The main security is the 9.185 per cent stake in Tata Sons held by Cyrus Investments, with additional collateral including 25 per cent of Afcons Infrastructure held by Goswami Infratech and 100 per cent of shares in EquiZen and Cyrus Investments, plus charges over assets and dividends from the Tata Sons stake. The NCDs carry a 40 per cent loan-to-value trigger.
The SP Group promoter family owns a total of 18.37 per cent of Tata Sons through Cyrus Investments and Sterling Investment Corporation.
Use of Proceeds and Refinancing Strategy
The bond issuance serves as part of the group's broader refinancing programme. The company plans to use approximately ₹17,500 crore to ₹17,800 crore to pay off loans associated with entities like Goswami Infratech and Capespan NCO. The remaining amount, around ₹3,250 crore to ₹3,850 crore, is designated for working capital and other business growth needs.
Market Context
The lowering of the threshold comes days after the Reserve Bank of India rejected Tata Sons' request for exemption from the core investment company category—a move that effectively mandates a public listing for the conglomerate. The mandatory listing of Tata Sons is expected to tighten the yields on SP Group's high-yield bonds, as it would give the debt-laden group much-needed liquidity to repay its debts. The investment entity flagged the high probability of value unlocking of Tata Sons' shares.
About Shapoorji Pallonji Group
The group's roots go back to 1865, when it began as a partnership called Littlewood Pallonji and undertook civic works in Bombay (now Mumbai). Over the decades, the firm moved from contractor to developer and investor, acquiring other businesses that shaped its financial base. As of FY23, the group recorded revenue of ₹33,375 crore. The conglomerate operates across construction, infrastructure, real estate, and financial services, with a current workforce exceeding 40,000 across India and internationally.