Eyeing a clean slate: Shapoorji Pallonji Group aims to become net debt free by March

November 05, 2021 5:45 AM

Intends to raise about Rs 3,655 crore via a combination of equity & debt; immediate plan is to sell stake in Mumbai-based Afcons Infrastructure & land parcel in Karnataka

“The plan is to emerge debt free and start the next financial year on a clean slate. With an improvement in the country’s economy, which is leading to a rise in overall businesses, and the debt now reduced to manageable levels, this shouldn’t be an issue,” one of the sources said.“The plan is to emerge debt free and start the next financial year on a clean slate. With an improvement in the country’s economy, which is leading to a rise in overall businesses, and the debt now reduced to manageable levels, this shouldn’t be an issue,” one of the sources said.

By Rajesh Kurup

Shapoorji Pallonji Group (SP Group) intends to raise about Rs 3,655 crore through a combination of equity and debt, including stake sale in certain companies, to emerge net-debt free by March next year.

The immediate plan is to sell stake in Mumbai-based construction and engineering company Afcons Infrastructure and land parcel in Karnataka. Following paring of stake in these companies, SP Group would raise debt for the remaining amount, sources close to the development said.

Further, internal accruals would also contribute to the kitty as the group expects funds to flow in from its core business of construction and real estate.
“The plan is to emerge debt free and start the next financial year on a clean slate. With an improvement in the country’s economy, which is leading to a rise in overall businesses, and the debt now reduced to manageable levels, this shouldn’t be an issue,” one of the sources said.

Afcons Infrastructure is a closely held company, with presence in road construction, general civil engineering works, offshore oil and gas among others. The group holds the land parcel through its textile arm in Karnataka. However, the quantum of the land parcel could not be immediately ascertained.

As of September, the 156-year-old business conglomerate had a net debt of Rs 10,900 crore, which was reduced to Rs 6,500 crore following a stake sale in its consumer durable firm Eureka Forbes. The group had raised Rs 4,400 crore from the stake sale after it offloaded a 72.56% stake to American private equity fund Advent International.

Eureka Forbes, a wholly-owned subsidiary of SP Group firm Forbes & Company, has presence in water purification, vacuum cleaning and health and safety solutions space.

Later in October, the Group raised another Rs 2,845 crore by selling a 40% stake in Sterling & Wilson Solar (SWSL) to Reliance New Energy Solar Ltd, a
wholly-owned subsidiary of billionaire Mukesh Ambani-controlled Reliance Industries Ltd.

The entire stake in Eureka Forbes and SWSL was sold by the promoters and the funding would be used to pare debt. Following this, the group’s debt stands at about Rs 3,655 crore.

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