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They said that SP Group held initial conversations with some investment banks last week and banker appointments for the IPO will take place next month if the group decides to move ahead with the listing process.
Earlier this year, SP Group set up a holding company for its real estate portfolio – Shapoorji Pallonji Real Estate – to consolidate all its realty holdings under a single roof, aiming to streamline the group’s corporate structure and also to make it easier to monetise the value of the business.
The proposed IPO of the real estate business is likely to see the company sell shares worth ₹4,000-5,000 crore, said one of the people cited above. He added that the group could look to raise a larger amount, depending on the market conditions, and that the details of the fundraising have not been firmed up yet.
“Given that SP Group is looking to ease debt at the promoter level, the IPO will have a large secondary share sale component, while some money will also be raised to repay debt at the real estate business,” he said.
An email sent to SP Group did not elicit a response till the time of publication.
Promoter debt and asset sales
The proposed IPO of its real estate business follows the recent public debut of Afcons Infrastructure and sale of other assets this year, which the group used to make substantial repayments on loans availed at the promoter level. Since its listing in early November, shares of Afcons Infra have climbed 13% from the issue price of ₹463 per share.
In June 2023, SP Group promoter entity Goswami Infratech raised ₹14,300 crore through rupee-denominated zero-coupon NCDs from a clutch of investors, including Cerberus Capital, Varde Partners, Canyon Capital, Davidson Kempner, as well as existing lenders Deutsche Bank, Edelweiss Special Opportunities Fund and Ares SSG. A significant part of these NCDs were later sold down to domestic investors, including HNIs and family offices.
Earlier in 2021, the group raised ₹20,000 crore against shares of Tata Sons held by SP Group entity Sterling Investment Corp Pvt Ltd.
Funds raised from the Afcons listing in October were used to make repayments to NCD holders and the group is now engaged in discussions to refinance the loans taken against Tata Sons shares. The ₹5,430-crore IPO of Afcons comprised a large secondary sale of shares by SP Group amounting to ₹4,180 crore. SP Group also sold a further ₹3,000 crore of Afcons shares in a pre-IPO round.
The group monetised its holding in two port companies this year. It sold its 56% stake in Gopalpur Port to Adani Ports and Special Economic Zone and its Dharamtar port to the JSW group.
Real Estate Business
With a development potential of over 142 million square feet, Shapoorji Pallonji Real Estate has a presence in cities such as Mumbai, Pune, Bangalore, Gurugram, and Kolkata, having a diverse portfolio comprising luxury apartments and opulent residences to aspirational homes for mid-income homebuyers as well as one of the largest mass housing projects in India – Shukhobrishti in Kolkata – where the group is developing 20,000 affordable homes.
SP Group’s residential real estate portfolio includes projects such as the BKC 9, BKC 28 and The Odyssey in Mumbai; Wildernest and Vahana in Pune; Parkwest 2.0 in Bengaluru. The group also has several residential projects under the Joyville brand across Mumbai, Pune and Gurugram.
Its commercial real estate portfolio under SP Infocity has office properties in Pune, Nagpur and Manesar.
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First Published: Dec 24, 2024 9:02 PM IST
