Shapoorji Pallonji Group has initiated a major capital market exercise by launching the initial public offering process for its realty arm, targeting a fundraise of Rs 8,000 crore. The infrastructure conglomerate has appointed six investment banks to manage this significant public offering.

IPO Structure and Management

The group has selected a consortium of six investment banks to handle the comprehensive IPO process. This multi-bank approach reflects the substantial size and complexity of the offering, ensuring adequate market coverage and investor outreach for the Rs 8,000-crore fundraising exercise.

Strategic Capital Market Move

This IPO represents a significant step for Shapoorji Pallonji Group in monetizing its real estate portfolio through public markets. The substantial fundraising target of Rs 8,000 crore positions this offering among the larger IPOs in the real estate sector.

The appointment of multiple investment banks demonstrates the group's commitment to ensuring comprehensive market coverage and professional execution of the public offering process. This structure typically facilitates broader investor participation and enhanced market reach for large-scale fundraising initiatives.

Shapoorji Pallonji Group's financing costs have increased significantly following delays in refinancing activities, with the group's Porteast Investment unit now paying higher rates on its substantial debt portfolio backed by Tata Sons equity.

Credit Cost Escalation Details

Porteast Investment has seen its private credit financing costs rise by approximately 2 percentage points to 21.75% after a contractual step-up mechanism was triggered. This repricing affects roughly ₹28,500 crore ($3.3 billion) of debt that is backed by the group's 9.2% stake in Tata Sons.

The step-up was activated after Goswami Infratech, a borrower connected to the financing structure, did not complete its refinancing by the December deadline. While this delay does not constitute a covenant breach, the existing terms require repricing of current borrowings when fresh debt is raised at higher costs.

Refinancing Timeline and Terms

Porteast has specifically approved an extension for Goswami's refinancing deadline to April 30, 2026. The facility was originally raised in June 2023 at 18.75% and was initially scheduled for optional repayment in December 2025. In November, the group approached investors with revised terms on the Goswami bonds, proposing to align the optional redemption date with the final maturity in April 2026.

Partial Debt Reduction and Fresh Funding

The Shapoorji Pallonji Group has made progress in reducing its overall debt burden through strategic asset monetisation. The group has repaid portions of its debt using proceeds from Afcons Infrastructure's public listing and the sale of Gopalpur Port and Dharamtar Port. Despite these efforts, approximately $1.7 billion remains outstanding.

In December, the group raised fresh bridge debt at 21.75%, matching the elevated rate of existing facilities. Sources indicated that while investors were willing to lend at lower rates due to positive developments regarding the Tata Sons stake, the pricing remained elevated due to the existing Goswami debt structure.

Recent Fundraising Activities

A Shapoorji Pallonji Group unit completed a private placement of approximately ₹1,600 crore through one-year non-convertible debentures (NCDs) with global credit investors. The investor group included Deutsche Bank, Farallon Capital, and Canyon Partners.

In mid-December, Goswami utilised funds from this facility to fully repay individual and minority retail investors. The company has informed remaining investors about ongoing refinancing efforts, with completion expected by March. The Porteast pricing structure includes provisions for rate resets to lower levels once the Goswami debt refinancing is completed.

Broader Financing Context

The original ₹28,500 crore issuance in May 2025 represented one of the largest private credit transactions backed by Indian promoter equity. The financing structure incorporated multiple creditor protections, including step-up coupons, most favoured nation (MFN) clauses, and requirements to monetise the group's real estate platform within 24 months, targeting approximately ₹13,000 crore.

The collateral package for the bonds encompasses the Tata Sons stake held through Sterling Investment Corp, complete ownership of the group's real estate division, and its oil and gas business, SP Energy. The December fundraising activity coincides with the group's discussions to raise $2.5 billion in additional debt, with completion anticipated by March. The pricing of this proposed transaction remains closely linked to ongoing settlement discussions with Tata Sons, where a successful share sale could substantially reduce borrowing costs.