The Shapoorji Pallonji (SP) Group is reportedly preparing to take its real estate business public as part of its strategy to reduce promoter-level debt further. This follows the successful IPO of its construction arm, Afcons Infrastructure, earlier this year.
Initial discussions have begun with investment banks, and decisions regarding the appointment of bankers for the IPO are expected next month. The real estate division, recently consolidated under the holding entity Shapoorji Pallonji Real Estate, aims to streamline the group’s corporate structure and maximize the value of its assets for monetization.
Potential Fundraising Plan
The proposed IPO is likely to be in the range of ₹ 4,000–5,000 crore, though it could be larger depending upon the market conditions at the time of floatation. A substantial part of money will likely come from a secondary share sale, while the rest amount would go to deleverage the real estate business.
The IPO plan comes after the major financial restructuring of the SP Group earlier in the year. It received money from asset sales and public offerings to repay the dues.
The group monetized stakes in Gopalpur Port and Dharamtar Port by selling the ports to big players in the Infrastructure industry. Proceeds from IPO-Pre IPO placements of Afcons Infrastructure also were made available for debt servicing. The Afcons Infrastructure shares have witnessed some strong gains since the listing in the stock exchange, reflecting investor confidence in the strategic plans of the group.
The IPO of the real estate company will also likely mark another step in the group’s effort to reinforce its financial health by shrinking its liabilities.
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Source: Moneycontrol
News Desk
