Shapoorji Pallonji Group Secures $3.3 Billion Refinancing Deal Backed by Tata Sons Stake and Core Assets

The Shapoorji Pallonji Group (SP Group), a prominent player in India's business landscape, has signed a term sheet to raise $3.3 billion through a structured refinancing transaction. This deal is backed by the group's significant holdings, including a 9.185 percent stake in Tata Sons, real estate assets, and cash flows from its oil and gas business.

The transaction is being structured as a zero-coupon non-convertible debenture (NCD) with a tenure of three years and an expected yield of 18.5–19 percent. This refinancing effort has garnered interest from marquee global credit investors such as Falloron, Cerberus, Ares Management, PIMCO, BlackRock, and Edelweiss Alternatives. The minimum investment size is set at Rs 10 crore per PAN, and the final documentation is expected to follow after the completion of due diligence.

The primary collateral for the refinancing includes a 9.185 percent stake in Tata Sons, held through Sterling Investment Corporation Pvt Ltd (SICPL). This stake is estimated to be valued at approximately $18.6 billion. Additionally, pledged shares of SP Group’s real estate platform, SPRE, are being offered as part of the security package, with a valuation of roughly $3.2 billion.

Oil and gas business cash flows have also been ringfenced to contribute towards interim repayments. According to sources, the structure provides for interim monetization of approximately $1.3 billion—representing 35 to 40 percent of the NCD face value—over the next 24 months. These interim payments are expected to come largely from the real estate and oil and gas verticals of the group.

The total loan-to-value (LTV) ratio for the transaction is estimated at a conservative 14.7 percent, providing significant collateral comfort for investors, according to one of the investors evaluating the deal. This conservative LTV ratio underscores the robustness of the transaction and the confidence of investors in the SP Group’s assets and cash flows.

The Shapoorji Pallonji Group, founded by Shapoorji Pallonji in 1938, is a diversified conglomerate with interests in construction, real estate, infrastructure, and energy. The group’s strategic move to secure this refinancing deal demonstrates its commitment to strengthening its financial position and leveraging its core assets to drive future growth.