India's SP Group unit receives debt downgrade ahead of $3 billion refinancing

MUMBAI: An Indian rating agency has downgraded a bond issued by Goswami Infratech, a Shapoorji Pallonji (SP) Group unit, citing delays in group-level fundraising versus earlier timelines and highlighting mounting refinancing risks.

The real estate and civil engineering firm’s non-convertible debentures were downgraded to B+, from BB-, CareEdge said on Wednesday.

Shapoorji Pallonji Group did not immediately respond to a Reuters request for comment.

Goswami Infratech’s plan to raise between $2.8 billion and $3.1 billion over the past few months has been delayed, with the surge in rupee hedging costs playing a major role.

The company has now planned to split its fresh fundraising between dollar and rupee bond issues, and would target the issues before the end of June, merchant bankers have said.

India’s SP Group unit gets investor nod for 2-month debt extension plea, sources say

The downgrade also takes into account the extension it sought to repay high-yield debt to June 30 from April 30, according to the rating agency, which investors have agreed to.

The company had raised 143 billion rupees ($1.51 billion) in June 2023 through this bond issue, in which marquee foreign investors had participated.

CareEdge further stated that the group had an alternate funding line assurance, even while the extension was being sought, to meet the redemption requirement on the original maturity date.

The bonds were originally issued at a yield of 18.75%, which has been stepped up due to breach of some covenants.

After partial pre-payments to some investors, the bonds have an outstanding principal amount of 83.43 billion rupees, with total repayment of around 136 billion rupees including the interest payout.