Shapoorji Pallonji Group, the No. 2 shareholder in Tata Sons, is trying to shore up cash for a 35 billion rupee payment as investors wager it will eventually unlock value from its Tata stake. According to people familiar with the discussions, the group has opened negotiations with lenders to draw on the greenshoe from its 213.5 billion rupee July financing, a step aimed at raising the additional 35 billion rupees. They said most of the incremental funding would come from Deutsche Bank AG, the underwriter of the July deal.
The sources, who asked not to be named because the talks are confidential, said SP Group did not respond when asked for comment, and Deutsche Bank declined to comment. On Monday, the company asked to extend the due date for the 35 billion rupee payment to the end of October, about a month later. They also noted the company would probably propose a yield modestly below the July borrowing, reflecting better secondary-market levels for SP Group.
The 213.5 billion rupee package put together in July combined local-currency bonds issued by Eqyizen Investment Pvt. with a separate dollar bond from Mercury Finance Co. Although part of the proceeds had been earmarked for Porteast's bonds, the cash was instead used to redeem Goswami Infratech bonds and cut leverage at other SP Group units - such as Simar Port - according to the people. Goswami's bonds had previously been extended and are now repaid.
Porteast raised $3.4 billion last year through zero-coupon bonds partly backed by SP Group's Tata Sons holding. Its loan-to-value ceiling was earlier 34%, and the group later obtained a waiver allowing that ratio to reach 40%. Porteast is now asking to prolong the 40% cap for an additional six months, with the current expiry on Sept. 30.
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SP Group's outlook is intertwined with a wider debate inside Tata Group over whether to list Tata Sons. The power struggle centers on Noel Tata and Natarajan Chandrasekaran, with Noel firmly opposing an IPO and arguing the holding company should remain private for as long as possible.
Last week, SP Group said it is ready to cooperate with Tata Sons if a listing were to proceed, portraying the move as a way to bridge differences between the families.
Until a listing or a share buyout takes shape, SP Group will likely keep rolling maturities, refinancing, or seeking extensions to meet near-term dues. The 160-year-old firm took on heavy borrowings around the pandemic and has since leaned on costlier private credit, secured multiple extensions from bondholders, and moved to list units and sell assets. For anyone with exposure to SP Group credit or to vehicles linked to Tata Sons, the near-term story is about liquidity and timing, with that roughly 18% Tata Sons stake as the pressure valve once it can be unlocked.
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