SP Group Signs $3.3 Billion Refinance Deal Backed by Tata Sons Stake

According to the news reports, the Shapoorji Pallonji Group (SP Group) has signed a term sheet to raise $3.3 billion (₹28,500 crore) through a structured refinancing arrangement. The funding is being raised via zero-coupon non-convertible debentures (NCDs) with a 3-year tenure. The debentures carry an annual yield of 19.75%, payable at maturity.

Collateral and Structure

The transaction is backed by a combination of holdings, including a 9.185% stake in Tata Sons, held through Sterling Investment Corporation Pvt Ltd (SICPL), with a value of this stake at approximately $18.6 billion. Additional security includes pledged shares from SP Group’s real estate arm, SPRE, which are valued at around $3.2 billion.

Cash flows from the group’s oil and gas operations have also been ring-fenced and included in the repayment structure. These will support interim payments during the bonds' tenure.

Interim Repayments and Terms

The structure allows for interim monetisation of approximately $1.3 billion, about 35% to 40% of the total NCD face value over the next 24 months. These interim payments are expected to come mainly from real estate and oil and gas cash flows.

The deal is being marketed to institutional investors with a minimum investment size of ₹10 crore per PAN. The transaction is designed with a loan-to-value (LTV) ratio of 14.7%.

Upon redemption, this debt is projected to reach ₹51,000 crore at the current exchange rate, due to a 3-year accrual of interest at 19.75%.

Investor Interest

As per the news reports, the offering has attracted attention from global credit investors such as Falloron, Cerberus, Ares Management, PIMCO, BlackRock, and Edelweiss Alternatives. Deutsche Bank is handling the arrangement. Final documentation is expected after the due diligence process is completed.

Read more: Shapoorji Pallonji Close to Signing $3.4 Billion Private Credit Deal.

The term sheet was signed on May 15, 2025. Settlement of the transaction is likely around May 21, 2025.

Conclusion

This refinancing is one of the largest private credit deals by an Indian group this year, using a mix of equity holdings, property assets, and operational cash flows to secure funding.

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