Here is a number that might stop you: 18.95%.
That is the annual yield on a three-year bond issued by an Indian infrastructure conglomerate.
That bond came from Shapoorji Pallonji Group, which just closed one of the largest private credit deals India has ever seen. The company raised about 151 billion rupees - roughly $1.6 billion - through rupee bonds. Deutsche Bank AG arranged both tranches.
The money has a specific job.
The rupee bond portion is structured as a zero-coupon bond. That means the company does not pay interest along the way. Instead, investors buy it at a discount and get the full face value at maturity.
The dollar bond piece raised $650 million at a 14.5% yield.
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High yields are one thing. Getting your money back is another.
What made this deal work is what sits behind it. The bonds are backed by two things: shares in Afcons Infrastructure Ltd. and, more importantly, the group's 18.4% stake in Tata Sons. Tata Sons is the holding company for one of India's biggest and most respected business empires.
Investors see that stake as a potential escape hatch. If Shapoorji Pallonji ever runs into trouble, it could sell or monetize those Tata shares to raise cash. That makes the borrowing less risky than it might look on paper.
A mix of local and global players bought the bonds. On the Indian side, investors included InCred Capital, DSP Finance, IIFL Capital Services, ASK Asset & Wealth Management, and Nuvama Wealth Management.
The global names are bigger and more familiar to anyone who follows distressed debt. Global investors including Cerberus Capital Management, Farallon Capital Management, and Davidson Kempner Capital Management each committed between $175 million and $200 million to the bonds.
This deal is not the finish line. It is a big step, but not the last one.
The group plans to raise 255 billion rupees overall. That means it still needs to find more money. Over the next six months, it intends to secure an additional $350 million in debt.
There is also a repayment clock ticking. Under the bond agreement, the company must pay back 135 billion rupees within 24 months. That is a lot of cash to come up with in two years.
The bottom line: This deal shows how private credit markets can step in when traditional bank loans run dry. For the investors involved, the high yields come with real collateral and a plausible path to getting paid back.
For someone watching from the outside, the story matters because it is a window into how big money works in emerging markets. High yields exist because there is real risk. The question is whether the collateral - especially that Tata Sons stake - is enough to make the gamble pay off.
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