Shapoorji Pallonji has raised $2.7 billion through a bond issuance via group entity Eqyizen Investments, with Deutsche Bank emerging as the largest investor.
The proceeds will be used to refinance around ₹14,500 crore of debt at Goswami Infratech, replace existing borrowings.
The bond issue is backed by Shapoorji Pallonji's 18.37% stake in Tata Sons, with the group indicating it may monetise part of the holding if Tata Sons proceeds with a future IPO.
Inside Shapoorji Pallonji's $2.7 Billion Debt Deal and the Tata Sons Connection
The engineering and construction conglomerate has raised $2.7 billion through a bond issuance led by global investors, with proceeds earmarked for debt refinancing and liquidity needs
Shapoorji Pallonji Group
Summary
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Shapoorji Pallonji has successfully closed a $2.7bn bond issuance this week through its group entity Eqyizen Investments, according to sources cited by Moneycontrol.
Deutsche Bank anchored the fundraising as the largest subscriber. The German lender invested $644mn (Rs 6,210 crore) in the offering.
The capital raise provides the conglomerate with required liquidity to address near-term liabilities. Proceeds will refinance Rs 14,500 crore of debt for group entity Goswami Infratech. Management will also use the funds to replace old debt and avert default risks, the publication reported.
The Shapoorji group did not answer email inquiries from the news outlet.
Global and Domestic Backers
Foreign institutional investors dominated the transaction. US-based Sageoak Capital invested $196mn (Rs 1,896 crore) into the offering. Cerberus Capital Management committed $173mn (Rs 1,671 crore) through a fund managed by Morgan Stanley Asia.
Burlington Loan Management and Varde Holdings each purchased over $100mn in bonds, data shows. The company also structured an offshore segment for the raise.
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Mercury Finance Company, an offshore special purpose vehicle based in Mauritius and overseen by Shapoorji Pallonji, issued $641mn (Rs 6,181 crore) in bonds. The entity subsequently passed the proceeds to the parent group.
Indian participants contributed smaller amounts. DSP Finance bought $36mn (Rs 350 crore) in bonds, while its promoter Hemendra Kothari invested $13.45mn (Rs 130 crore) in his personal capacity. IIFL Management Services allocated $7.24mn (Rs 70 crore) toward the issue.
Collateral and Listing Uncertainty
Significant collateral backs the debt. According to media reports, the Shapoorji group has pledged its 18.37 per cent stake in Tata Sons as collateral for the bonds.
The conglomerate has assured bondholders regarding future liquidity. Management plans to monetise a portion of this Tata Sons stake once the holding company launches a public offering to meet Reserve Bank of India norms, the reports showed.
However, a Tata Sons public market debut remains unconfirmed. Analysts indicate that the central bank regulations are ambiguous. The Reserve Bank of India maintains discretion over the mandate, meaning a listing is not strictly guaranteed, analysts told the financial portal.
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