Shapoorji Pallonji seeks bondholder nod for LTV relief on earlier NCDs

Mumbai: The Shapoorji Pallonji Group is seeking bondholder approval to temporarily ease a key loan-to-value (LTV) covenant on its rupee notes, citing market volatility linked to geopolitical tensions stemming from the Iran war.

The group has asked holders of ₹28,600 crore 19.75% bonds issued by Porteast Investment to raise the LTV threshold to 40% from 34% for three months, according to people familiar with the matter. The move comes as the Mistry family-controlled conglomerate works on a roughly ₹28,000 crore refinancing debt at Goswami Infratech.

Under existing terms, an LTV above 34% for five consecutive days would trigger a default. The ratio is currently hovering near 33% due to the impact of current geopolitical tensions on equity markets, leaving limited headroom and prompting the request for a temporary waiver.


LTV has been impacted by the decline in shares of Tata Consultancy Services, which accounts for about half the collateral backing the bonds. The stock has fallen about 30% in the past one year amid concerns over geopolitical disruptions and potential concerns over the impact of artificial intelligence on IT services companies. Geopolitical disruptions have adversely impacted equity markets including other Tata Group stocks.

"The company has asked for a temporary increase in the LTV ratio to 40% from 34% for a three-month period, a step recommended by anchor investors for Goswami bonds to provide near-term flexibility amid volatile markets," a person familiar with the matter said on condition of anonymity. "The revision is not structural and will be rolled back once conditions stabilize," the person added, citing uncertainty tied to a potential escalation in the Iran war.