One basis point is a hundredth of a percentage point.
The proposed round of fundraising, likely to be completed early April, could have a 2:1 split in favour of the domestic market. At home, the infrastructure conglomerate would seek to garner about ₹15,000-16,000 crore in rupee-denominated non-convertible debentures (NCDs).
Shapoorji Pallonji Group is set to raise approximately ₹25,000 crore through a bond issue. This fundraising effort, planned for early April, is expected to have a lower pricing than previous borrowings. Improved prospects for asset sales and a potential settlement regarding its stake in Tata Sons are boosting investor confidence.
Stake Monetisation Prospects
Overseas, SP Group has planned a three-year dollar bond of $750 million to $1 billion said the people cited above, unwilling to give further details as the ongoing discussions with potential investors are in the private domain.
Pricing on the overall package is likely to be tighter than the 18.75% coupon at which the group raised Rs 14,300 crore in 2023 through Goswami Infratech. That facility is due to mature on April 30 this year.
“The pricing is likely to come down significantly as the contours are becoming clearer,” one person aware of the talks said. The Tata Sons stake monetisation prospects for the SP Group enhance the recovery visibility for lenders and bondholders, said this person.
TATA STOCK
Bankers said the improved pricing outlook has come from greater clarity around the long-running dispute between the SP Group and Tata Sons, including discussions linked to stake monetisation. The SP Group, led by the Mistry family, holds about 18.75% in Tata Sons, making it the largest minority shareholder in India’s biggest conglomerate.
While the debate continues over whether Tata Sons must list under Reserve Bank of India (RBI) norms applicable to upper-layer non-banking financial companies, market participants said either a listing or a negotiated settlement would unlock value and improve SP Group’s credit profile.
Tata Trusts Chairman Noel Tata is understood to have outlined conditions around the listing issue in the context of leadership decisions at Tata Sons, adding a layer of complexity to the discussions, as reported by ET on February 24. However, since one of the conditions is an eventual settlement with the SP Group gives further comfort to lenders on stake monetisation, said one of the sources cited above.
Investor appetite appears strong with at least a third of the fund likely to come from dollar bond investors. The rest is likely to come from foreign banks, domestic investors and private credit funds.
Timelines for the issues aren’t certain yet. However, lenders said the base case, which assumes partial deleveraging at the group backed by monetisation, is intact.
If executed at the tighter end of expectations, the transaction would result in a visible reduction in SP Group’s funding costs and signal renewed investor confidence in its refinancing initiatives.
