Shapoorji Pallonji & Co. Plans $300 Million
Shapoorji Pallonji & Co., the building and construction division of the Shapoorji Pallonji (SP) Group, is set to raise $300 million by way of rupee-denominated credit to refinance debt. The facility will be backed by Afcons Infrastructure shares and some real estate assets, with negotiations being held with various lenders. The company is said to be inviting the funds at an interest rate of about 15%.
The action aims to reprime an earlier term loan of about ₹2,250 crore (~$263 million) that HDFC Bank had provided in March 2022. The refinancing is part of the larger SP Group plan to restructure its debt obligations as pressure builds on it to alleviate liquidity woes.
The SP Group, with total outstanding liabilities of close to ₹60,000 crore (~$7.1 billion), has been aggressively seeking various methods of dealing with its debt, such as rupee bonds, securitized instruments, and share-backed loans. It had raised $3.34 billion earlier this year in a large private credit transaction, one of India’s largest, financed by its holding in Tata Sons.
The latest refinancing plan is considered a tactical step to take care of short-term repayment and ensure operational stability. Yet the comparatively high borrowing cost highlights the risk perception of the group’s finances. The leveraging of core operating assets like Afcons shares as collateral demonstrates the urgency to maximize liquidity and ensure business continuity.
Effective implementation of this loan would provide short-term relief, but long-term stability would be in sight only if capital is deployed wisely and group assets are monetized.
