Debt-laden SP Group seeks $1.3 billion through realty IPO and energy asset sales
Mumbai: Shapoorji Pallonji (SP) Group, the Mumbai-headquartered real estate and infrastructure conglomerate run by billionaire Shapoor Mistry, is planning to raise $1.3 billion (about ₹11,500 crore) over the next two years by taking its real estate business public, and by selling some assets in its oil and gas businesses.
The move is part of a bigger plan to manage the group's rising debts. The money raised will be used to make interim payments to creditors of a recent $3.3 billion private credit loan that the group took last week, according to the deal's term sheet. The $3.3-billion deal in turn was taken to refinance and repay some other, older loans.
SP Group has total outstanding debt of ₹55,000- ₹60,000 crore as of 31 March 2024, according to news reports. Nearly ₹32,000 crore has reportedly been raised from global private credit funds and wealthy high net-worth individuals over the past three years in two tranches via non-convertible debentures.
To raise fresh funds of $1.3 billion, the group is looking to list its real estate business, Shapoorji Pallonji Real Estate, which is valued at around $5 billion, according to lenders who spoke with Mint. The IPO could see the company selling shares worth ₹4,000-5,000 crore, per a Moneycontrol report in December last year. It would also be the second IPO from the SP Group stable since October 2024, when construction firm Afcons Infrastructure was listed to raise ₹5,430 crore.
In parallel, the group's oil and gas company, SP Energy, also plans to sell two FPSOs (floating production storage and offloading), which are estimated to be valued at around $800 million, according to the lenders cited above. FPSO units are floating offshore facilities used in the oil and gas industry to process and store hydrocarbons.
Emails to SP group remained unanswered till press time.
'SP group has been very focused in doing what they have committed to their bond holders," one of the lenders cited earlier said on condition of anonymity, adding that it is reflected in the fact that they have been consistently selling assets.
'So if you look at the Afcon sale or prior to that when they had to pay back the banks after the restructuring, which happened during covid, they sold a bunch of assets," this person added. 'So they have been selling all off their assets to make sure that their lender community gets paid."
Piling on debt
Earlier this week, SP group signed the country's largest private credit deal with a consortium of lenders to raise $3.3 billion through a three-year zero-coupon bond at an annual yield of 19.75%. The proceeds of this transaction will be used to refinance existing debt taken about three years ago by the group's main investment vehicle Sterling Investment Corp.
The holding companies–Sterling Investment and Cyrus Investment–had borrowed ₹26,000 crore as of March 2024 against the SP group's 9.2% stake in Tata Sons (holding company of the Tata Group), and pledged shares of Shapoorji Pallonji Real Estate and SP Energy.
Ares, Farallon, Cerberus Capital Management and Davidson Kempner are likely to be the largest subscribers of this bond, according to lenders cited above. Others such as PIMCO, BlackRock and Edelweiss Alternatives have also subscribed to smaller amounts, according to these lenders.
The proceeds from this bond will also be used to refinance a ₹14,300 crore debt taken by group company Goswami Infratech Private Limited (GIPL), of which it had repaid ₹7,500 crore through funds raised from the Afcons listing and monetization of port assets such as Gopalpur Port and Dharamtar Port.
GIPL is an equally held joint venture between SC Finance and Investments Private Limited and SP Finance Private Limited, which are in turn promoted by the Mistry family.
The $3.3-billion fund raising from private credit funds came after its request for a ₹20,000 crore loan from Power Finance Corporation was turned down. PFC's board had raised concerns regarding the NBFC's ability to underwrite the loan to SP group, which had large exposure to real estate construction and infrastructure.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Mint
4 hours ago
- Mint
Raymond Realty eyes higher sales, launches in FY26
Bengaluru: Raymond Realty, which is scheduled to list on the stock exchanges on 1 July, is looking at faster growth through higher home sales and several project launches in 2025-26, said a top company executive. The real estate firm was demerged from Raymond Ltd on 1 May and will list as a standalone entity. Mumbai-based Raymond Realty clocked around ₹2,300 crore of sales in FY25, and is targeting at least 20% growth this year. It also expects a 20% return on capital employed. Also read: Gautam Singhania meets European royal Prince Albert II: Here's why they met, what they discussed & more By the end of FY26, it plans to launch six projects - two in suburban Thane, where Raymond owns about 100 acres, and four projects in different locations across Mumbai Metropolitan Region (MMR) - Wadala, Sion, Mahim and Bandra. The developer currently has six projects under execution. Raymond Realty's residential portfolio, combining projects under execution and the ones to be launched, has a gross development value (GDV) of ₹40,000 crore. Of this, projects worth ₹25,000 crore GDV would be in Thane alone. The remaining projects of ₹15,000 crore GDV are in MMR. 'In the next 3-4 years, we will double our sales and portfolio size. As a company, we are trying to solve for two things in the industry - quality of projects and timely delivery. We also want to focus on post delivery service, and have started our own facilities management arm," Raymond Realty chief executive Harmohan Sahni said in an interview. Also read: Centre links part of state capex loans to new reforms in land, and digitization The demerger will consolidate the group's real estate business under a single entity, which, going forward, will further unlock the firm's potential as a pure-play property development vertical. The company will sell at a broad price range of ₹20,000-65,000 per sq ft, and is not looking to sell below that, or in the uber luxury category. 'We can't go lower than ₹20,000-22,000 per sq ft. We will not dilute the brand, and it is not a price-sensitive market," he added. MMR, India's most valuable property market, stands as one of the leading contributors to pan-India launches and sales. Most of the projects Raymond Realty has signed are redevelopment projects. The newly signed projects, in Mahim and Wadala, are a Maharashtra Housing and Area Development Authority (Mhada) redevelopment and a slum redevelopment project respectively. Also read: Centre weighs easing conditions for interest-free capex loans to states 'We will continue to pursue an asset-light model by signing projects through the joint development route as it is capital efficient. We are a net debt-free company," Sahni said. Beyond Mumbai, the company is exploring project opportunities to enter the Pune property market. 'We are choosy about the deals we want to sign," he added. MMR among all the top cities witnessed the highest sales of around 155,335 units in 2024, almost the same as 2023. Pune followed with around 81,090 units sold. The two western markets together led residential sales last year, said Anarock Property Consultants.
Time of India
5 hours ago
- Time of India
CMPDI to enter rare earth race; eyes new revenue streams beyond coal
New Delhi: Central Mine Planning and Design Institute ( CMPDI ), the Ranchi-headquartered arm of Coal India Ltd, is gearing up to broaden its consultancy services beyond the coal sector and foray into the critical minerals and rare earth space, a top official told ET EnergyWorld. 'We have enhanced our laboratory capabilities to undertake studies on critical minerals and rare earth elements. The equipment procurement has been completed and we are ready to offer consultancy in this new segment,' Manoj Kumar, CMD, CMPDI, said in an exclusive interaction. CMPDI, known for its expertise in coal exploration, mining planning and mine development, is now positioning itself as a diversified geo-scientific consultancy entity. The company is actively pursuing international opportunities and has already supported Mozambique in mine development, washery establishment, and logistics infrastructure design in FY 25. Broadening the mandate beyond coal Kumar said the organisation is moving strategically to build expertise in non-coal domains such as sand resource evaluation, and soil studies. 'We have successfully closed two bauxite and two base metal exploration projects. Four more such non-coal mineral exploration projects are currently underway,' he said. In addition to mineral exploration, CMPDI is offering studies on sand replenishment and soil moisture—a move aimed at supporting environmental sustainability and infrastructure development. 'Sand replenishment studies are becoming increasingly important given the environmental concerns around sand mining. Similarly, soil moisture assessments are key to land reclamation and sustainable agricultural planning,' he explained. Expanding global footprint Highlighting CMPDI's growing international ambitions, Kumar said the institute is actively open for overseas consultancy assignments across geographies. The successful Mozambique engagement has boosted confidence in replicating the model in other countries. 'We helped in mine development, wash plant design and logistic development in Mozambique. This model of bundled consultancy—from geology to mining to infrastructure—is something we want to replicate in mineral-rich developing countries,' he added. Integrated approach to resource mapping CMPDI, which was primarily set up to provide planning and technical services to the coal industry, is leveraging its multi-disciplinary team of geologists, mining engineers, environmental experts, and GIS specialists to offer end-to-end solutions in mineral resource development. 'Our vision is to become the go-to consultant for any exploration and mine planning activity, irrespective of the commodity. We already have a strong track record in coal and now we are building that same depth in other critical areas,' Kumar said. Government push on critical minerals The company's move comes at a time when the government is aggressively pushing for domestic exploration and development of critical minerals like lithium, cobalt, nickel, and rare earth elements—essential for India's clean energy transition and high-tech manufacturing. CMPDI is expected to play a key technical role in upcoming auctions and prospecting of these strategic resources, especially as India seeks to reduce import dependency and develop local value chains. 'Given the rising importance of critical and rare earth minerals in global geopolitics and clean technology, we want to be future-ready. Our lab enhancements and capability building are aligned with this strategic shift,' Kumar noted. CMPDI's expansion strategy also aligns with the larger objective of Coal India Ltd to diversify its revenue base and reduce dependency on thermal coal in the long term. Strengthening technical infrastructure CMPDI has recently augmented its lab facilities with advanced analytical equipment to undertake geochemical, mineralogical, and metallurgical studies required for critical mineral exploration. The laboratory upgradation also enables the institute to support pilot-scale beneficiation studies—vital for assessing the techno-economic viability of new mineral deposits. 'Our lab now has the capacity to study everything from coal to complex rare earth samples. This gives us a significant advantage in offering integrated mineral assessment solutions,' he said. Meanwhile, CMPDI is also preparing for its initial public offering (IPO), having recently filed the Draft Red Herring Prospectus (DRHP) with SEBI. The IPO, structured as a 10% Offer for Sale by parent company Coal India Ltd, marks the first listing of any Coal India subsidiary. While the consultancy firm will not receive fresh capital from the issue, the move is expected to enhance transparency, unlock value, and provide financial autonomy as CMPDI expands its services into critical minerals, rare earths, and global consultancy markets.
Time of India
5 hours ago
- Time of India
Iran-Israel war escalation: Experts warn of cascading impact on India's trade with West Asia; crude prices, exports at risk
The escalating war between Iran and Israel could have wide-ranging repercussions for India's trade with the broader West Asian region, experts warned, citing early signs of export disruptions and heightened shipping and insurance risks. The conflict has already started impacting India's trade with Iran and Israel, and any further escalation could endanger exports to countries such as Iraq, Jordan, Lebanon, Syria and Yemen, they said. 'We are in for big trouble now because of this war. It will have a cascading effect on India's trade with West Asian countries,' said Sharad Kumar Saraf, founder chairman of Mumbai-based Technocraft Industries, which exports drum closures and packaging components, PTI quoted. Saraf said his firm is already holding back shipments to both Israel and Iran due to the deteriorating situation. Strategic choke points under stress The recent US airstrikes on Iran — aimed at neutralising its nuclear programme — have worsened the security outlook, particularly around the Strait of Hormuz, a narrow but critical oil shipping lane through which 60–65 per cent of India's crude imports pass. The Global Trade Research Initiative (GTRI) noted that any escalation in the region, especially one that disrupts the Hormuz Strait, would severely affect India's energy security, increase shipping costs and drive up inflation. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Buy Brass Idols - Handmade Brass Statues for Home & Gifting Luxeartisanship Buy Now Undo 'Any disruption to shipping lanes, port access or financial systems in this corridor would severely impact India's trade flows,' said Ajay Srivastava, GTRI founder. India's exposure to Iran, Israel, and West Asia India exported goods worth $1.24 billion to Iran in FY25, primarily Basmati rice ($753.2 million), banana, soya meal, Bengal gram, and tea. Imports from Iran were $441.8 million. Trade with Israel was larger, with $2.1 billion in exports and $1.6 billion in imports during 2024–25. GTRI warned that perishable shipments like rice, bananas, and tea are especially vulnerable due to delays and higher insurance costs. 'A prolonged conflict could dampen Iranian demand and squeeze Indian exporters,' Srivastava said. Trade with the broader West Asia region — including Iraq, Jordan, Lebanon, Syria and Yemen — stood at $8.6 billion in exports and $33.1 billion in imports, making it a significant trading corridor. Rising global shipping and security risks The fresh conflict builds on already strained global shipping routes. Attacks by Yemen-based Houthi rebels since the October 2023 Israel-Hamas war have hampered commercial movement through the Red Sea. Around 80 per cent of India's European trade passes through this route, as does a large portion of shipments to the US. The Red Sea also handles 30 per cent of global container traffic and 12 per cent of total world trade, making these disruptions especially significant. India's overall exports had grown 6 per cent to $825 billion in FY25, and the government is targeting $900 billion this fiscal. However, May data showed a 2.17 per cent decline in exports, driven by a drop in petroleum product shipments. The World Trade Organisation (WTO) has also revised its outlook, saying global trade will contract 0.2 per cent in 2025, against the earlier projection of 2.7 per cent growth, due to the tariff war and geopolitical instability. Experts now warn that the widening Iran-Israel war, combined with the uncertain impact of US involvement and potential disruptions in the Hormuz Strait, may further derail India's trade recovery and energy security. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
