Shapoorji Group secures $3.4 billion in record Deutsche-led credit deal

Time of India

31-05-2025

Deutsche Bank anchored the largest private credit deal outside of the US, garnering $3.35 billion for the Shapoorji Pallonji Group, as the infrastructure conglomerate used a part of its Tata Sons stake as collateral to draw commitments from the likes of BlackRock and Morgan Stanley in a global funding syndicate, people familiar with the matter said.
The three-year non-convertible debentures (NCDs) carry a 19.75% yield, compounded annually and payable at maturity. Funds were earlier raised at a rate that was about a percentage point lower. In 2023, SP Group's Goswami Infratech had raised $1.7 billion at 18.75%. The German lender committed $893 million to the bonds, and is likely to retain a significant amount - of more than $500 million - on its books. Deutsche Bank has syndicated to financiers including BlackRock, Sona Capital, Morgan Stanley, and PIMCO. Firms such as Sona Capital and PIMCO executed their first major private credit India trade through this deal.
Distribution of Exposure
The entire funding round of $3.35 billion drew three distinct pools of capital -- existing bondholders in Sterling bonds, existing bondholders in Goswami bonds, and a fresh slate of global private credit investors from the U.S., U.K., Hong Kong, Singapore, and India.
The Deutsche Bank also distributed its exposure across a consortium of international credit funds. BlackRock picked up $70 million, Sona committed $180 million, Morgan Stanley Investment Management took $60 million, and PIMCO added $45 million, bringing the consortium's total to about $355 million. Separately, Ares has invested in $500 million.
Farallon Capital, a long-time creditor to SP Group, followed with a $596 million (Rs 5,100 crore) investment. Davidson Kempner and Cerberus Capital committed $401 million and $474 million respectively. Spokespersons of Deutsche Bank and SP Group did not respond to requests for comment.
Regulatory Tweak
The debt is secured by SP Group's 9.2% stake in Tata Sons held via Sterling Investment, its real estate arm Shapoorji Pallonji Real Estate, and SP Energy, the oil and gas business. The issuance, arranged solely by Deutsche Bank, is the first large corporate bond placement under the revised FPI norms, which now allow offshore investments through the general limit route instead of the restrictive Voluntary Retention Route (VRR).
DB originally targeted a March closing but ultimately executed the transaction six weeks later after geopolitical stability. 'This regulatory tweak, where the RBI revised FPI norms for corporate bonds, helped investors invest through the general investment route,' said a source. 'It was key for investors that wanted one-off exposure to India without committing to an ongoing India-dedicated book.' While the transaction is partially going to be used for refinancing existing debt and funding growth in real estate and EPC businesses, it will change how large conglomerates access longterm capital, said an investor in the bond.
'Most people see Shapoorji as a real estate player. But it is India's largest EPC group after L&T,' one bond investor in the deal said. 'This deal will deepen nonbank financing avenues for corporate India and will significantly deepen the private credit market in India.' Other investors in the deal include Kingstreet $150 million, EAAA $82 million, Synergy Metals & Mining $75 million, BroadPeak $55 million, Discovery $25 million, and ASK Finance $23 million, among others. In total, 14 investors participated.