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India's Shapoorji Pallonji Group has approached investors to extend the maturity of debt raised by its real estate and civil engineering arm, Goswami Infratech, as refinancing plans face delays. The high-yield notes, with an outstanding value of approximately INR 83.43 billion, were due to mature at the end of the month. The group has been attempting to raise between USD 2.75 billion and USD 3.1 billion through a mix of dollar and rupee-denominated instruments. However, rising hedging costs linked to central bank actions and global market volatility have slowed execution. Additional caution among investors due to stress in the US private credit market has further affected timelines, with refinancing now expected to conclude in the coming months.
India's Shapoorji Pallonji Group has sought investor approval in recent days to extend the maturity of debt issued by its real estate and civil engineering subsidiary, Goswami Infratech, as delays in refinancing have disrupted its original repayment schedule in Mumbai. The move comes as the group attempts to manage upcoming obligations on high-yield notes that are due to mature at the end of the month, amid evolving market conditions and funding challenges. Advertisement
The refinancing exercise, which has been under way for several months, involves raising between USD 2.75 billion and USD 3.1 billion through a combination of instruments. According to persons familiar with the matter, the structure includes USD-denominated bonds amounting to roughly USD 500 million to USD 1 billion, with the remaining funds expected to be mobilised through rupee-denominated zero-coupon bonds. The proceeds are intended to refinance existing high-yield notes that, as per Care Ratings, have an outstanding value of INR 83.43 billion.
Execution of the refinancing has been delayed due to a sharp increase in hedging costs linked to the Indian rupee. These costs rose after the central bank introduced measures aimed at curbing speculative trading in the currency, at a time when geopolitical tensions in the Middle East contributed to heightened volatility in global financial markets. As a result, the cost of raising foreign currency debt has increased, affecting the feasibility and timing of the planned issuance.
Market participants indicated that the transaction was initially targeted for closure earlier in the month, but elevated hedging expenses have pushed the timeline to the coming months. The delay has prompted the group to seek an extension of the maturity profile of its existing debt to ensure continuity and avoid near-term repayment pressures.
Investor sentiment has also been influenced by stress in the US private credit market, which has led to increased caution among global lenders. This has had a bearing on demand dynamics and pricing expectations for new issuances, further contributing to the decision to defer the refinancing process.
Earlier in the year, the group had indicated that it intended to refinance Goswami Infratech's bonds well ahead of maturity and had received in-principle interest from investors. It had also suggested that improved credit metrics could result in tighter pricing for the new issuance. However, prevailing market conditions have necessitated a recalibration of timelines and funding strategy.
The company had not issued an official response to queries regarding the revised plan at the time of reporting.
Source - Reuters
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