Shapoorji Pallonji Group to Issue ₹25,000 Crore Bond at Lower Price

As per Economic Times report, Shapoorji Pallonji Group (SP) is preparing a new fundraising programme that will raise about ₹25,000 crore through a mix of rupee and dollar bonds, scheduled for early April. 

Bond Size, Currency Split and Pricing Expectations 

The issue is expected to be divided roughly 2 to 1 in favour of the domestic market, with rupee non convertible debentures valued at ₹15,000 to ₹16,000 crore. The remaining amount will be raised via a three year dollar bond of $750 million to $1 billion.  

Sources say the pricing will be 300 to 400 basis points below the 18.75% coupon that was applied to the ₹14,300 crore raise in 2023. 

Investor Participation and Allocation Timeline 

Initial talks have begun with a range of investors including mutual funds and foreign banks. The company received board approval and aims to complete allocations in the first half of March, with the final settlement expected shortly after. 

Read More: Canara Bank Plans ₹5,000 Crore Fundraise Through Basel III Tier 2 Bonds! 

Factors Influencing the Lower Pricing 

Improved visibility on asset sales and progress on the settlement of the group’s stake in Tata Sons are cited as reasons for the tighter pricing. Lenders view the potential resolution as reducing credit risk and enhancing the group’s repayment capacity. 

Impact on Funding Costs 

If the issue is priced at the lower end of expectations, the transaction will lower the group’s overall funding costs and demonstrate renewed confidence from the bond market in its refinancing strategy. 

Conclusion 

The planned ₹25,000 crore bond programme combines domestic and dollar components, anticipates a price below the previous round, and is linked to ongoing asset and settlement developments. 

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