Shapoorji Pallonji Group to Take its Real Estate Business Public Through IPO

Shapoorji Pallonji Group to Take its Real Estate Business Public Through IPO

Mumbai: The Shapoorji Pallonji (SP) Group, after a successful initial public offering (IPO) of its flagship construction firm Afcons Infrastructure, is now in talks with investment banks to take its real estate business public through an IPO.

The group plans to pare down the promoter-level debt by monetising its real estate business, said people aware of the matter. Discussions are currently underway with some top-tier investment banks for the IPO, according to sources cited by Moneycontrol.

As part of this plan, SP Group has set up a holding company for its real estate portfolio - Shapoorji Pallonji Real Estate - to consolidate all its realty holdings under one roof. This move aims to streamline the group's corporate structure and make it easier to monetise the value of the business.

According to the sources cited by Moneycontrol, the proposed IPO is expected to see the company sell shares worth ₹4,000-5,000 crore. While this seems a substantial amount, the group could consider raising more depending on market conditions, said one of the people involved in the discussions.

The IPO will primarily have a large secondary share sale component, while some money will also be raised to repay debts at the real estate business, added another source.

This move comes after SP Group's recent public debut of Afcons Infrastructure and sales of other assets this year. The firm utilized these proceeds to make substantial repayments on loans taken up by the promoters.

Following its listing in early November, shares of Afcons Infra have climbed 13% from the issue price of ₹463 per share.

In another development, SP Group promoter entity Goswami Infratech raised ₹14,300 crore through rupee-denominated zero-coupon NCDs this year. A significant portion of these NCDs were later sold down to domestic investors, including High Net Worth Individuals (HNIs) and family offices.

Funds from the Afcons listing in October were utilised to pay NCD holders, leaving room for potential debt refinancing by taking out loans from shares of Tata Sons held by Sterling Investment Corp Pvt. Ltd.

The Shapoorji Pallonji Group has significant real estate holdings across major Indian cities such as Mumbai, Pune, Bangalore, Gurugram, and Kolkata. Its real estate business comprises a diverse portfolio of luxury apartments, opulent residences, aspirational homes, and one of the largest mass-housing projects in India.

"We expect the SP Group's real estate IPO to be an attractive opportunity given its potential for investors to tap into the growing demand for residential and commercial space," said Ritesh Raj Goenka, Vice Chairman, Mumbai Stock Exchange.

However, any details related to the proposed IPO will be updated once finalisations take place.