Shapoorji Pallonji reduces minimum ticket size for high-yield bonds amid refinancing strategies

The Shapoorji Pallonji Group has lowered the entry threshold for its high-yield debt to ₹1 crore, expanding access to investors and supporting a major refinancing plan tied to its stake in Tata Sons and other assets.

Shapoorji Pallonji Group has lowered the minimum ticket size for its high-yield debt to ₹1 crore from ₹10 crore, broadening access to a financing package that was initially aimed at wealthy investors prepared to commit far larger sums, according to Business Standard. Wealth managers are now offering yields of up to 17.6 per cent, slightly below the 17.8 per cent previously marketed to high-net-worth and ultra-high-net-worth clients. (business-standard.com)

The securities sit within EquiZen Investments, a promoter vehicle owned by the SP Group, which has issued ₹21,350 crore of zero-coupon, unlisted, unrated non-convertible debentures with a three-year maturity. Business Standard reported that the notes carry a face value of ₹1 crore and include a 12-month make-whole clause, while the deal is being sold as comparatively defensive because it is backed by collateral. (business-standard.com)

At the heart of the package is the 9.185 per cent stake in Tata Sons held by Cyrus Investments. The collateral set also includes a pledge over 25 per cent of Afcons Infrastructure owned by Goswami Infratech, plus 100 per cent of the shares of EquiZen and Cyrus Investments, together with charges over EquiZen’s assets and any proceeds or dividends from the Tata Sons holding. Business Standard said the initial loan-to-value ratio is 22.1 per cent, with a 40 per cent trigger that would force the borrower to post additional collateral if the threshold is breached for five straight trading days. (business-standard.com)

Most of the money, or about ₹17,500 crore to ₹17,800 crore, is earmarked for refinancing existing debt at Goswami Infratech and Capespan NCO, while the balance is intended for working capital and growth needs. The structure also requires the SP Group to pare debt further, including repayment of ₹11,275 crore within 24 months and a resolution, or agreed terms, for a Tata Sons initial public offering within 18 months. That timing has taken on added importance after the Reserve Bank of India rejected Tata Sons’ bid for exemption from the core investment company category, a step that effectively pushes the holding company towards a public listing, Business Standard reported. On Thursday, Tata Sons said its board had also resolved to move towards compliance with the RBI’s requirements and to reappoint Natarajan Chandrasekaran as executive chairman for another five years after his current term ends on February 20, 2027. (business-standard.com)