ShapoorjiPallonji group inks record $3.4 billion private credit deal

The three-year, zero-coupon rupee bond has an annual yield of 19.75 per cent. Proceeds will primarily be used to refinance existing debt

Real estate and construction conglomerate Shapoorji Pallonji group signed a $3.4 billion private credit deal, a person familiar with the matter said, marking the biggest of its kind in the country.

The three-year, zero-coupon rupee bond has an annual yield of 19.75 per cent. Proceeds will primarily be used to refinance existing debt.  

The company inked the deal with the trustee, according to the person. The money is likely to flow from lenders in the coming days, the person added.

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.  

That’s fuelled a burst of competition among foreign and local investors. KKR & Co, Oaktree Capital Management and Goldman Sachs Group Inc are among the foreign firms expanding in the market. 

Local players are launching araft of funds, with Kotak Alternate Asset Managers Ltd planning a $2 billion fund. Shapoorji has evolved into a family-run construction behemoth, building skyscrapers, landmarks and complex infrastructure. 

Its portfolio includes the country’s central bank and the Al Alam palace for the Sultan of Oman.

About a dozen large investors, including Ares Management Corp, Cerberus Capital Management LP, Davidson Kempner Capital Management, and Farallon Capital Management were participating in the Shapoorji deal, people familiar with the matter had previously said. Deutsche Bank is also investing, and acting as the sole arranger and the trustee.

A representative for the company didn’t respond to requests for comment outside of normal business hours. The deal comes at a busy time for Indian debt markets.  

Billionaire Mukesh Ambani-owned Reliance Industries has obtained a $2.98 billion-equivalent loan, according to people familiar with the matter, the largest such deal for an Indian borrower in more than a year.