India’s Shapoorji Pallonji Group has secured commitments for more than half of its planned $2.7 billion fundraising and aims to complete the deal before end of next month, two sources familiar with the matter said on Friday.
The group plans to raise $950 million through dollar bonds issued by a unit, with the rest through rupee debt raised by Goswami Infratech, the sources said.
The Shapoorji Pallonji Group is a major construction and infrastructure conglomerate and the second-largest shareholder in Tata Sons, the holding company of the Tata group.
Shapoorji Pallonji has struggled with high debt and has been unable to monetise its stake in unlisted Tata Sons.
Investors have committed about $1.5 billion across the rupee and dollar portions of the fundraising, the sources said.
Foreign banks have secured commitments worth about $500 million equivalent from clients for the rupee debt tranche, they added.
“For the dollar issue, the company has received interest for the complete amount, while large private credit funds have shown comfort to invest in the rupee bond,” one of the sources said.
The group plans to issue three-year dollar bonds with a put/call option at the end of the first year. Initial yield guidance is expected at 14.00%–14.50%.
The bonds will be privately placed, though the launch timing could not be immediately ascertained. Deutsche Bank is the arranger.
The sources requested anonymity as they are not authorised to speak to the media. Shapoorji Pallonji Group did not immediately respond to a Reuters request for comment, while Deutsche Bank declined to comment.
Reuters reported last week that BlackRock, the world’s largest money manager, is considering an initial investment of $100 million to $200 million in the dollar bond issue.
The sources said PIMCO, another large global asset manager, and Europe-based LGT Bank have also shown interest in investing in the group’s dollar bonds. The investors did not respond to Reuters emails seeking comment.
Goswami Infratech’s fundraising plans have been delayed, partly due to a surge in rupee hedging costs, forcing the company to seek a two-month extension on repayment of high-yield debt from its original April 30 maturity.
The company raised 143 billion rupees through a bond issue in June 2023, with marquee foreign investors participating. The planned debt raise will refinance those notes.
Earlier this month, CareEdge Ratings downgraded Goswami Infratech’s bonds to B+ from BB-, citing delays in group-level fundraising.
Reuters
