SP group seals deal for $3.4 billion private credit fund raise

Bonds have been issued to Cerberus Capital Management, Farallon Capital Management and several others.
| Photo Credit:
Andrii Yalanskyi

In one of the biggest funding transactions in the private credit space in India, the Shapoorji Pallonji group has finally sealed the deal to raise $3.4 billion through zero-coupon rupee bonds with a tenor of three years, sources said.

The proceeds being raised will be used to refinance existing debt of the group, that has been a source of concern for a while now. The bonds have a yield of 19.75 per cent, which is seen as being on the high side.

Bonds issued

According to sources, the bonds have been issued to institutions such as Cerberus Capital Management, Farallon Capital Management, and several others.

SP group did not respond to an email sent to it seeking comment on the deal.

The current fund raise, which has been in the works for a while now, is expected to bring substantial relief to the group and could lead to an upgrade in credit ratings.

It has been trying to shore up its liquidity position through strategic monetisation of group firms. Last year group flagship Afcons Infrastructure was finally listed, while it also monetised Gopalpur Port for ₹2,000 crore. Its real estate arm is also expected to go public soon.

The consolidated external debt of the group was at a sizeable ₹20,000 crore at the end of March 2024, though it had managed to reduce it from the ₹37,000 crore that it was carrying in August 2020.

ICRA rating

In February this year, rating agency ICRA had reaffirmed its negative outlook for Shapoorji Pallonji and Company Private Limited, due to the continued stress on its liquidity position.

It attributed the stress due to the delay in requisite funding tie-up (both non-fund based, and fund based), subdued operating profitability from engineering, procurement, and construction (EPC) operations and weak coverage metrics in FY24 and first half of FY25, “which is expected to continue in the near term”.

Published on May 16, 2025