Shapoorji Pallonji prices Rs 21, 500 cr financing with Deutsche, BlackRock among investors

Shapoorji Pallonji Group has received commitments of about Rs 21,500 crore for the first tranche of its planned refinancing through a mix of rupee and dollar-denominated debt, with the issue fully subscribed by domestic and global institutional investors, people familiar with the matter said. The rupee bonds, with three year tenor, have been priced to yield about 18.95%, while the dollar tranche is expected to carry a yield of around 14.5%.

Funds are being raised from multiple pools of capital which include foreign banks, foreign real money investors, private credit, and domestic investors. The company has attracted several new investors with around half of the demand for the financing is estimated to have come from investors participating in a Shapoorji Pallonji financing for the first time.

On the rupee side, investors include Deutsche Bank, Cerberus Capital Management, Davidson Kempner Capital Management, Varde Partners, Ares Management, BroadPeak and Farallon Capital. The dollar tranche has drawn commitments from real money investors including BlackRock, Brevan Howard, Centiva Capital, Goldman Sachs Asset Management, RV Capital, among others. Deutsche Bank is the sole arranger for this financing.


The first tranche comprises a Rs 15,200 crore rupee denominated issuance, while the balance, about $650 million, which is being raised from offshore dollar investors. Funding is scheduled to be completed on July 20.

The dollar bond issuance was oversubscribed, one of the people said. The rupee tranche also received strong demand and allocations have largely been finalised.

The SP Group owns 18.37% of the unlisted Tata Sons, which is facing pressure from multiple stakeholders to go public. The term-sheet circulated to potential investors also includes milestones linked to a possible listing or settlement agreement within 18 months. The fundraising is being undertaken through Eqyizen Investment, an SP Group entity.

Investors drew significant comfort from recent regulatory changes made by RBI regarding upper layer NBFCs mainly with respect to asset size more than Rs 1 lakh crores and indirect access of public funds. Tata Sons meets both criteria thereby making it upper layer NBFC hence its listing is a very high likelihood event, said one of the sources involved.

Emails send to SP Group and all lenders did not receive any comments.

The potential listing of Tata Sons, in which the Shapoorji Pallonji Group owns an 18.37% stake. The refinancing is backed by the group's shareholding in Tata Sons and is done to partly replace higher cost debt with longer tenor funding.

The current fundraising marks the first leg of a larger refinancing programme that the group has been marketing over the past several weeks.

“With this fund raise, the company is reducing reliance on a handful of lenders,” said an investor in the new rupee tranche.

The Shapoorji Pallonji Group has been among the largest issuers in India's high-yield credit market in recent years, tapping both domestic and offshore investors to refinance debt and fund its capital requirements.