Credit costs rise for Shapoorji Pallonji Group firm as refinancing timeline slips

Mumbai: Shapoorji Pallonji Group's Porteast Investment has seen the cost of its private credit financing rise about 2 percentage points to 21.75% after a contractual step-up linked to payment milestones was triggered, people familiar with the matter told ET. The repricing applies to roughly ₹28,500 crore ($3.3 billion) of debt backed by 9.2% of Tata Sons' stake.

The step-up was triggered after Goswami Infratech, a borrower linked to the structure, did not complete a refinancing by December end, said the people cited above. Although not a covenant breach, the delay requires existing borrowings to be repriced if fresh debt was raised at a higher cost.

Porteast specifically approved extension in the refinancing date for Goswami to April 30, 2026.


A Shapoorji spokesperson did not immediately respond to ET's request for a comment.

In November, the group had reached out to investors with revised terms on the Goswami bonds. The facility, raised in June 2023 at 18.75%, was originally slated for optional repayment in December 2025. Goswami has since proposed aligning the optional redemption date with the final maturity in April 2026.

Partly Repaid

SP has repaid partially using proceeds from Afcons Infrastructure's listing and the monetisation of Gopalpur Port and Dharamtar Port, although about $1.7 billion remains outstanding.

Separately, the group raised fresh bridge debt in December at 21.75%, the sources said. A source mentioned that given positive developments in the past few months on the Tata Sons stake, investors were willing to lend funds cheaper, but given existing Goswami debt at 21.75%, even the bridge debt is priced at the same level. Shapoorji Pallonji Group unit privately placed about ₹1,600 crore of one-year NCDs with global credit investors including Deutsche Bank, Farallon Capital and Canyon Partners.

"Around mid-December, Goswami repaid individual and minority retail investors in full, using funds drawn from the Farallon, Canyon and Deutsche Bank facility," one person familiar with the transaction said. "The company has informed remaining investors that it is in the process of refinancing the balance and expects to complete the exercise by March."

To be sure, the Porteast pricing would be reset to lower levels once the Goswami debt is refinanced by March.

The original ₹28,500 crore issuance in May 2025 was among the largest private credit transactions backed by Indian promoter equity.

The financing included several creditor protections, including the step-up coupon, the MFN clause and a requirement to monetise the group's real estate platform within 24 months, targeting about ₹13,000 crore. Collateral for the bonds included the Tata Sons stake held through Sterling Investment Corp, full ownership of the group's real estate arm and its oil and gas business, SP Energy.

The December fundraise comes as the Shapoorji Pallonji Group is in talks to raise $2.5 billion in fresh debt and likely to conclude by March. Pricing of the proposed transaction is closely tied to the outcome of the group's ongoing settlement discussions with Tata Sons. A successful share sale could materially lower borrowing costs.