SP Group aims to repay Rs 7,300 cr to Debenture Holders

Shapoorji Pallonji (SP) Group entity Goswami Infratech will clear dues worth ₹7,300 crore to debenture holders this week, cutting the size of an outstanding debt issuance that took place in May last year by half, according to sources in the know.

Goswami Infratech issued non-convertible debentures (NCD) in May last year worth ₹14,300 crore. The debentures were backed by the Mistry family's stake in Tata Sons held through Cyrus Investments. The Mistry family who are promoters of Shapoorji Pallonji own around 18% stake in Tata Sons with half of that stake being held through Cyrus Investments.

ET first reported about the debt issuance in its edition of May 27, 2023.

The redemption of the NCDs will be funded through proceeds from the recent initial public offering of group company Afcons and the proceeds from the sale of Gopalpur Ports to the Adani group, as per the sources.

Afcons successfully closed its IPO recently raising ₹8,398 crore including the pre-IPO anchor book which witnessed participation from marquee global investors.

Goswami Infratech was one of the companies that sold shares in the offering as part of the offer for sale (OFS) component. However, the offer document of Afcons does not state the end-use of the funds from the OFS as there are no regulatory requirements to do so.

Shapoorji Pallonji group had not responded to ET's queries sent on Wednesday until press time on Friday. The bulk of last year's NCD issuance was subscribed to by Deutsche Bank, Cerberus Capital, Canyon, Davidson Kempner and Varde Partners.

The issuance comprised of zero coupon non-convertible debentures which are redeemed upon maturity until when no interest is paid.

While the original investors still hold the bulk of the NCDs they were also purchased by high-net-worth individuals and family offices in secondary deals. "This is a major derisking event," an analyst with a wealth management firm who brokered some of the secondary deals said on condition of anonymity.

SP Group's promoter entities are looking to further pare down debt that had been taken over the past three years. That outstanding debt could be in the range of ₹22,000 crore.