‘Sterling books strong enough to back Shapoorji Pallonji Group’s $3.3 billion fundraise plans’

The Shapoorji Pallonji (SP) group is in talks with the RBI to address concerns about Sterling Investment Corporation's financial strength, crucial for its $3.3 billion fundraise aimed at refinancing existing investors. The regulator is scrutinizing SICPL's capital adequacy, given its role in backing the fundraise, while the SP group emphasizes the value of its Tata Sons stake as collateral.

Mumbai: The Shapoorji Pallonji (SP) group is understood to be in discussions with the Reserve Bank of India to allay concerns raised over the balance sheet strength of Sterling Investment Corporation, which is providing credit support to the group's upcoming $3.3 billion fundraise. Sources close to the group said they have conveyed to the regulator details around the financial strength that Tata Sons shares offer.

The value of the SP Group's 18.37% stake in Tata Sons, based just on its holdings in listed Tata Group companies, is over ₹3 lakh crore ($35 billion). Deutsche Bank has the exclusive mandate on the $3.

3 billion fundraise, whose proceeds will primarily refinance existing investors. The SP group has pledged its entire holding in Tata Sons of which Sterling Investment holds 9.19%, sources said.

SP group did not comment.120262122The regulator had raised queries on the capital adequacy of SICPL, in the context of the upcoming fundraise. If SICPL is backing the fundraiser, it could be required to hold 15% of the $3.

3 billion as capital, i.e, around ₹3,800 crore, its current capital base is around ₹700 crore. Sterling Investment Corporation, which was a base layer NBFC, was recently classified as a mid-layer NBFC under the scale-based regulations.

The company does not access public funds or public deposits. Promoted by the Mistry family, SICPL, holds a 9.18% stake in Tata Sons-the holding company of the Tata Group-and has pledged its shares as part of the latest fundraising plan.

Another 8.815% stake in Tata Sons held by the SP Group is through Cyrus Investments.The transaction, originally targeted for completion by March, has been delayed and is now expected to close in the coming weeks.

The pause comes amid rising global risk aversion, widening spreads in US Treasuries and corporate bonds, and renewed concerns over tariffs under a potential Donald Trump administration.The group is offering a minimum yield of 18.75% on proposed three-year non-convertible debentures (NCDs), mirroring terms on its previous ₹14,300 crore zero-coupon, around three years NCD issuance via Goswami Infratech in June 2023.

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