Shapoorji Pallonji likely to pay bondholders by October-end; Afcons IPO to open next week

Driven by strong demand from investors, the SP group has already upsized the Afcons IPO plans to Rs 8,400 crore, Moneycontrol reported on October 7, as against the earlier plan of raising Rs 7,000 crore.

The Shapoorji Pallonji (SP) group is expected to make a Rs 1,800 crore interest payment to its bondholders by the end of October following the closure of the Gopalpur port stake sale and the launch of Afcons Infrastructure initial public offering next week, people familiar with the development said.

The IPO of the group’s flagship Afcons Infrastructure Ltd will open for subscription in the middle of the coming week, the people said, adding the company expects a good response to the offer.

“With the Gopalpur Port sale to Adani closed and the Afcons IPO set to launch next week and the entire IPO process to be completed by month-end, SP group is looking to make the interest payment on the NCDs on October 30, barring any minor delay in closure of Afcons IPO,” one of the people cited above said.

The SP Group and Afcons Infrastructure had not responded to Moneycontrol's queries at the time of publishing of this report.

In September, the group secured approval from bondholders, who hold non-convertible debentures worth Rs 14,300 crore to put off the interest payment by three months until December 31.

The group had to seek an extension as its plans to monetise certain assets took longer and also didn’t generate enough money to cover the entire interest payment. Key among these plans were stake sales in Gopalpur and Dharamtar ports and Afcons IPO.

In a notice in September, the SP Group informed lenders that the sale of Dharamtar Port to JSW Group in January and Gopalpur stake to the Adani group would fetch Rs 250 crore and Rs 850 crore, respectively, falling short of its expectations of Rs 1,500 crore.

The sale of Gopalpur Port was closed on October 11.

The shortfall means that the Afcons IPO assumes more significance in the group's plans to honour its debt obligations. The proposed IPO will be launched around the middle of next week, sources told Moneycontrol.

Driven by strong demand, the SP group has already upsized the IPO plans to Rs 8,400 crore from Rs 7,000 crore, as Moneycontrol reported on October 7.

The IPO will now include a secondary sale of shares through a pre-IPO round of Rs 3,500-4000 crore, while the IPO size will be reduced to around Rs 4,000-4,500 crore.

With the revised IPO plan, the SP Group is now looking to raise Rs 7,150 crore by selling its shares in Afcons, against the earlier plan of selling shares worth Rs 5,750 crore. The increased funds from Afcons will help further ease the group’s debt issues.

Afcons will raise Rs 1,250 crore from the IPO to meet its business needs, unchanged from the original plan.