Shapoorji closes over Rs 29,000-cr record India private debt deal

By Saikat Das

Indian real estate and construction conglomerate Shapoorji Pallonji Group has completed a Rs 29,087 crore ($3.4 billion) financing in the country’s biggest ever private credit deal, according to people familiar with the matter.

About a dozen large investors — some using multiple funds — bought zero-coupon rupee bonds that offer a yield of 19.75 per cent, the people said, asking not to be identified because the information is private. The debt matures in three years.

Top investors include Ares Management Corp, Cerberus Capital Management, Davidson Kempner Capital Management and Farallon Capital Management, people said. Deutsche Bank acted as the sole arranger of the deal and also invested in it.

Deutsche invested about Rs 7,699.5 cr ($900 million) and will down-sell a portion of the debt, the people said, adding that Cerberus and Davidson bought about Rs 4,063.62 cr ($475 million) and Rs 3,635.87 cr ($425 million) worth of bonds, respectively. Ares has committed about Rs 4,277.5 cr ($500) million for subscribing to those bonds, according to other people familiar with the deal.

BlackRock is in talks with Deutsche Bank to invest about Rs 855.5 cr ($100 million) in the deal, according to one of the people cited above.

Foreign Inflows

The deal swelled foreign inflows into corporate bonds. Foreign investors bought a net Rs 16,254 crore ($1.9b) of Indian company bonds on Thursday, depository data compiled by Bloomberg showed. That’s the highest ever single-day purchase by foreigners as per data going back to 2013.

Indian investors also participated in the deal, with ASK Wealth Advisors and some family offices buying a portion of the offering, the people said. EAAA India Alternatives Ltd., one of the country’s largest domestic private credit funds, bought about Rs 727.17 cr ($85 million) of the bonds, said one of the people.

The financing is a landmark in India’s growing private credit industry, which is getting a boost as Prime Minister Narendra Modi’s infrastructure push increases funding demands for everything from solar power to roads.

A representative for Shapoorji didn’t immediately respond to requests for comment outside of normal business hours. Deutsche Bank and Davidson Kempner declined to comment. Ares, Cerberus, Farallon, EAAA, ASK and BlackRock did not immediately reply to Bloomberg’s requests seeking comments.