Some of the global funds which participated in Shapoorji Pallonji (SP) Group’s last round of borrowing may join in once more as the conglomerate gears up for another major fundraising exercise. People familiar with the matter said some of the investors such as Cerberus Capital, Ares Management, Farallon Capital Management and Davidson Kempner Capital Management — all key participants in the group’s previous debt raise earlier this year — are likely to return for the new round.
The SP Group is planning to raise about $2.5 billion early next year to refinance the debt of Goswami Infratech, its holding arm that backs the group’s stake in Tata Sons. The debt is due for maturity in April 2026, prompting the group to move swiftly to lock in new funding. Company executives are scheduled to meet investors in Singapore this week as part of this effort.
According to people tracking the matter, the group hopes to secure funds at a lower yield than before. “The lenders know the group well, they have already done their due diligence, and they have the liquidity to participate again,” said one of the people cited above. “SP will push hard to close the deal on better terms.”
The group declined to comment, and queries to Ares, Cerberus, Farallon, Davidson Kempner and Deutsche Bank, which were among the lead arrangers in the earlier round, did not elicit responses till the time of going to the press.
Analysts said the group’s plan to raise fresh debt is logical, given the delay in any potential liquidity event such as an IPO or a stake sale in Tata Sons. “Until their exit through Tata Sons materialises, private credit remains their most viable option,” a fund manager who tracks the group’s borrowings said.
In 2023, Goswami Infratech raised `14,300 crore at a yield of 18.75%, secured by the group’s Tata Sons shareholding. While SP had initially aimed to pare down debt through stake sales, recent uncertainties around governance issues at Tata Trusts have slowed that plan. The company has proposed aligning its optional redemption date with the final maturity in April next year.
A portion of Goswami’s outstanding debt was repaid after the listing of Afcons Infrastructure and the sale of Gopalpur Port, but around `15,000 crore still remains. The SP Group owns an 18.37% stake in Tata Sons, valued at over Rs 3 lakh crore, based on the listed holdings of the Tata group companies.
In its last major borrowing in May this year, SP raised $3.35 billion through non-convertible debentures carrying a yield of 19.75%. That issue was backed by a 9.2% stake in Tata Sons, along with guarantees from SP Real Estate and SP Energy. Deutsche Bank committed nearly $893 million and syndicated the remainder to other investors, including Farallon ($596 million), Ares ($500 million), Cerberus ($474 million) and Davidson Kempner ($401 million).
Going ahead, SP Group is also exploring value unlocking through the public listing of Shapoorji Pallonji Real Estate within the next two years, alongside monetisation of certain non-core assets.