Shapoorji Pallonji Group plans to raise $2.5 billion by selling assets to reduce debt and improve leverage metrics

The Shapoorji Pallonji (SP) Group, a leading infrastructure and real estate company, is planning to raise $2.5 billion by selling some of its assets to reduce debt and improve leverage metrics.

The group is looking to sell its stake in Afcons Infrastructure, a company it acquired from ICICI Bank, and Gopalpur Ports, an asset it acquired from metal trader Sara International and entrepreneur Mahimananda Mishra of Orissa Stevedores.

In addition, the group is considering selling a portion of its interests in real estate assets with a development size of over 100 million square feet. The proceeds from asset monetization will be used to reduce its debt of Rs 21,000 crore and for other purposes. The SP Group declined to comment on the matter.

The group had previously attempted to list Afcons Infrastructure on Indian stock exchanges, but the proposal was shelved despite receiving regulatory approvals. The group is now reviving its plans to sell Gopalpur Ports due to the improved business environment. Cargo movement at the port was previously impacted by export duty on certain commodities like iron ore, but this tax has since been eliminated.

The SP Group, led by Shapoor Mistry, has been exploring various fundraising options to address rising interest rates and leverage metrics. It has already divested several assets, including water purifier maker Eureka Forbes, the Jammu-Udhampur highway asset, Forbes Facility Services, and Sterling & Wilson Renewable Energy, to reduce loan obligations.

The group had also raised $1.3 billion by pledging half of its 18.37% stake in Tata Sons with Farallon Capital and Ares SSG Capital. These moves helped SP exit RBI’s Covid debt-restructuring scheme without any haircut to lenders ahead of the timeline. SP and related parties still own 33% in Sterling & Wilson Renewable, which they plan to exit in the future. Majority-owned by Reliance Industries, the renewable company has a market cap of Rs 7,000 crore.

Apart from the fresh asset sale plans, the SP Group is also raising $1.75 billion from pledging its remaining Tata Sons stake. The group is currently holding roadshows in Singapore and Hong Kong with foreign fund managers to raise funds.

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