Shapoorji Group Secures $3.35 Billion in Landmark Private Credit Deal Led by Deutsche Bank

In a record-breaking financial move, the Shapoorji Pallonji (SP) Group has successfully raised $3.35 billion in the largest-ever private credit transaction outside the United States. The deal, orchestrated by Deutsche Bank, saw the infrastructure giant leverage part of its 9.2% stake in Tata Sons as collateral to attract a global consortium of investors.

High-Yield Bond Structure and Key Investors

The funds were raised through three-year non-convertible debentures (NCDs) with an annual yield of 19.75%, higher than the 18.75% yield offered in the group’s previous $1.7 billion raise by Goswami Infratech in 2023. The bonds are compounded annually and payable at maturity.

Deutsche Bank contributed $893 million to the issue and is expected to retain over $500 million, with the remainder syndicated to heavyweight institutional investors such as BlackRock, Sona Capital, Morgan Stanley, and PIMCO. This transaction marks a first in India for private credit involvement from firms like Sona Capital and PIMCO.

Widespread Global Participation

The funding round attracted three categories of investors: existing Sterling bondholders, current Goswami bond investors, and a new class of private credit investors from the US, UK, Hong Kong, Singapore, and India. Key individual investments included:

• Sona Capital: $180 million
• BlackRock: $70 million
• Morgan Stanley Investment Management: $60 million
• PIMCO: $45 million
• Ares Capital: $500 million
• Farallon Capital: $596 million
• Davidson Kempner: $401 million
• Cerberus Capital: $474 million

Collateral and Regulatory Milestones

The transaction is backed by SP Group’s shareholding in Tata Sons via Sterling Investment, along with real estate assets from Shapoorji Pallonji Real Estate and its oil & gas unit, SP Energy. It also marks the first significant corporate bond placement following recent reforms to the Foreign Portfolio Investor (FPI) regime, enabling offshore investment through the general limit route instead of the previously required Voluntary Retention Route (VRR).

Deal Completion and Strategic Use

Initially slated for a March close, the deal was delayed by six weeks due to geopolitical uncertainties. Proceeds from the raise will refinance existing debt and fuel growth in the group’s real estate and EPC businesses.

This landmark deal not only reinforces SP Group’s capital strength but also opens new avenues for Indian conglomerates seeking global private credit funding.

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