SP Group opens debut dollar debt issue after multiple delays, sources say

MUMBAI: India’s Shapoorji Pallonji Group opened its first-ever U.S. dollar bond issue for subscription on Friday, looking to raise $650 million, three sources aware of the matter said.

The bond issue, delayed several times since the start of the year, is part of the company’s planned 255 billion rupees ($2.68 billion) fundraise, mostly to refinance existing debt.

The delay was due to uncertainty over whether the group can unlock investments in the unlisted Tata Sons, in which it is a large shareholder, the sources said.

The sources said that easing hedging costs since the central bank’s measures to encourage dollar inflows could have turned the tide.

Mercury Finance, an SP Group company, is selling three-year securities at a yield of 14.50%, with a right to redeem them at the end of one year, the sources, who requested anonymity as they were not authorised to speak to the media, said.

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SP Group did not respond to a Reuters email seeking comment.

According to the sources, Deutsche Bank is the sole arranger for the issue and has underwritten a part of it, while BlackRock, the world’s largest asset manager, is also likely to invest in it.

Deutsche Bank declined to comment, while BlackRock did not reply to a Reuters query seeking confirmation. Alongside the dollar bond, another group entity, Eqyizen Investment, will sell three-year zero-coupon bonds for the remaining amount, at a yield of 18.95%, Reuters reported last week.

In early May, Reuters reported, citing sources, that BlackRock had agreed to invest in SP Group’s planned dollar bonds. The asset manager was considering an investment of $100 million to $200 million via an Asia-focused fund.

In June 2023, Goswami Infratech, another SP Group company, raised 143 billion rupees through zero-coupon bonds, selling them to foreign private credit funds at a yield of 18.75%.

The company has extended the maturity of those notes twice, most recently to July 31 from June 30.