Some bondholders of Shapoorji Pallonji Group, India's largest private credit borrower, are attempting to sell debt linked to one of its units as prolonged refinancing talks test investor patience, according to people familiar with the matter. Traders in Singapore and Hong Kong have been offering the so-called non-convertible debentures of subsidiary Goswami Infratech Pvt. at about 90% of par in the past two weeks, although it was not immediately clear whether any trades were executed, the people said. In credit markets, such levels can indicate that holders are starting to have concerns about potential strains, even if they are still far from distressed levels.
Refinancing Strain
An investment unit of the infrastructure conglomerate has recently been asking creditors to allow it to delay the repayment of the notes with ₹8,343 crore ($884 million) outstanding that mature this month. Some investors who individually hold the equivalent of $100 million or less were seeking to exit or trim their positions, the people said. Shapoorji did not respond to a request for comment.
Shapoorji is closely watched in India's private credit market, one of Asia's fastest growing, and in the nation's economy given its clout employing more than 37,000 people. Founded in 1865 and with iconic construction projects including the building that houses the Reserve Bank of India, Shapoorji sprang to the attention of global debt funds last year when it secured $3.4 billion from investors, including Ares Management Corp and Cerberus Capital Management.
Bond Pricing and Yields
The notes have already been extended once in April, with the company agreeing to pay investors a 25 basis points consent fee to push out the due date then. Goswami is now seeking to extend its zero-coupon bonds by at least a month beyond the June 30 maturity date.
| Metric | Detail |
|---|---|
| Issuer | Goswami Infratech Pvt. (Shapoorji subsidiary) |
| Instrument | Zero-coupon non-convertible debentures (private credit) |
| Outstanding | ₹8,343 crore ($884 million) |
| Maturity date | June 30 (originally; extended once in April) |
| Current yield | 21.75% (up from 18.75% at issuance in 2023) |
| Secondary market price | ~90% of par |
| Consent fee (April) | 25 basis points |
Goswami issued the zero-coupon bonds in 2023 in what was then the country's largest high-yield debt sale, pricing the notes at an 18.75% yield. While the outstanding principal has since fallen, the yield on the notes has risen to 21.75%.
Borrowings by Goswami are backed partially by Shapoorji's 18.4% stake in Tata Sons Pvt., the unlisted holding company of the Tata Group. Tata Sons derives much of its worth from its holding in Tata Consultancy Services, whose shares are trading near a six-year low amid a broader selloff in software stocks, weighing on Tata Sons' valuation.
Implications for Private Credit and Trade Finance
The group — which operates across engineering and construction, real estate, infrastructure, energy and industrial projects — has faced liquidity pressures since the pandemic after it piled on large amounts of debt, prompting it to list subsidiaries and offload assets. Shapoorji has been trying since late last year to refinance debt and reduce near-term repayment risks.
For finance executives and treasury professionals, this case illustrates the rising cost of capital in India's private credit market. Yields of 21.75% on zero-coupon bonds imply steep implied interest costs, which can ripple through supply chains and increase the cost of trade finance for companies in the infrastructure and construction sectors. The difficulty in refinancing highlights how liquidity strains at large conglomerates can affect credit availability for their vendors and contractors, potentially tightening working capital conditions more broadly.
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