Shapoorji Pallonji Group to tap banks to refinance ₹2,000-cr loan

Mumbai: The Shapoorji Pallonji (SP) Group is likely to tap mainstream banks instead of private credit to refinance about ₹2,000 crore of debt taken from HDFC Bank for an unlisted group entity, people aware of the switch in fundraising plans told ET. Private credit costs significantly more than a bank credit line.

Earlier, the group had held initial exploratory discussions with Ascertis Private Credit to refinance the debt at Shapoorji Pallonji and Co Pvt. (SPCPL). "The group is now more likely to refinance its obligations through banks rather than private credit," said a person familiar with the matter. "Banks have already shown interest, given the group's improving performance and recent asset-level developments."

The new bank loan is likely to be collateralised by shares of Afcons Infrastructure and certain real estate assets. Private credit would have been more expensive, with pricing significantly above the 11.5-12% levels currently available from banks.

The refinancing is likely later next year as the HDFC Bank loan is a long-term facility. The group is currently focused on the more immediate refinancing of debt on the books of Goswami Infratech, which has a maturity in April 2026. Any reworking of the security package or need for additional borrowing is also expected to be handled through banks.

"The likelihood of this deal (HDFC Bank refinancing) moving ahead this year is very low," the person said, adding that SP Group is preparing to formally close the discussions.

SPCPL had earlier tapped HDFC, prior to its merger with HDFC Bank, in 2022 for a larger ₹4,000 crore facility as part of its debt restructuring. In July 2025, SPCPL had begun evaluating options to refinance this existing HDFC Bank exposure.

Separately, the SP Group is in discussions with investors to raise about ₹25,000 crore through a new NCD issuance, with pricing talks centred around a 14-15% internal rate of return. The proposal includes two potential triggers linked to Tata Sons, its key collateral, for investors: the long-anticipated Tata Sons listing or a mutually agreed roadmap for the SP Group's exit by bringing in investors like a sovereign wealth fund.

With 18.37% stake of Tata Sons pledged, any progress on a listing or exit framework would offer valuation clarity. However, the group cannot independently monetise its stake; any buyback, investor entry or restructuring would require Tata Sons' approval.