The Shapoorji Pallonji (SP) Group, one of India’s most prominent conglomerates, is on the verge of finalizing a $3.2 billion refinancing deal with global credit funds.
This significant move aims to restructure the SP Group existing debt obligations, bolster its financial position, and ensure continued operational excellence across its diverse business sectors, including fine chemicals, biotech, and pharmaceuticals.
What is the Refinancing Deal?
The refinancing deal is being led by global alternative asset investors Davidson Kempner and Cerberus Capital, with additional financing from Farallon Capital and ARES, both of which will roll over portions of their maturing debt.
A substantial part of this loan is linked to Sterling Investments Pvt Ltd, the promoter entity of SP Group. Sterling Investments had previously secured $2.6 billion in 2021 from Ares Management and Farallon Capital for a three-and-a-half-year term. Notably, Sterling Investments holds more than 9% in Tata Sons, the holding company of the Tata Group, making this stake a key asset in the refinancing transaction.
History & Legacy
Founded in 1865, Shapoorji Pallonji Group started as a construction company and gradually expanded into various industries. Over the decades, it has played a vital role in shaping India’s infrastructure and urban development. The company has also established itself in international markets, particularly in the Middle East, Africa, and South Asia.
With a legacy spanning over 150 years, the group operates across multiple sectors, including engineering, construction, real estate, infrastructure, energy, and financial services. Known for delivering high-quality and innovative solutions, SP Group has a strong presence both in India and globally.
SP Group’s Expertise and Global Achievements
SP Group has become a leading player across industries, completing 145 major projects in the past year alone. The group specializes in sectors such as fine chemicals, biotech, and pharmaceuticals, partnering with global giants like Ferring Pharmaceuticals, KBI Biopharma, and Merck. SP Group’s success is underpinned by its team of 56 industry specialists and two dedicated Swiss-based facilities, ensuring it can meet the complex demands of its clients in highly regulated sectors.
How Will the Funds Be Used?
The funds raised through this refinancing will primarily be allocated to:
- Repay high-yield non-convertible debentures (NCDs) due in the first half of 2025.
- Replace expensive debt with more structured, long-term financing solutions.
- Support business growth and strengthen operations, especially in engineering, construction, infrastructure, and pharmaceuticals.
Although SP Group initially engaged with Power Finance Corporation (PFC) to refinance its upcoming debt at a lower interest rate, the loan was ultimately not sanctioned by PFC’s Investment Committee.
Founders’ Perspective
For the leadership of SP Group, this refinancing is a crucial step toward long-term financial stability and growth. The group continues to monetize assets and expand its global footprint. Recent moves include:
- The sale of the group’s stake in Gopalpur Port to Adani Ports.
- The initial public offering (IPO) of Afcons Infrastructure, its construction unit.
Conclusion
With the refinancing agreement expected to be signed in March 2025, SP Group is poised to reinforce its financial foundation and ensure continued growth across its diverse industries, including engineering, construction, infrastructure, and pharmaceuticals. The involvement of major global investors signals strong confidence in SP Group’s business fundamentals and long-term potential.
