The Shapoorji Pallonji (SP) Group has again approached Tata Sons seeking to monetise part of its 18.4% holding in the Tata Group's holding company, according to people familiar with the matter cited by Moneycontrol.
The Mistry family-controlled conglomerate wants to raise liquidity and reduce its high-cost debt rather than wait for a potential Tata Sons listing.
The renewed request follows a proposal placed before the Tata Sons board by Tata Trusts chairman Noel Tata, under which the SP Group is seeking at least ₹25,000 crore through a partial monetisation of its stake.
SP Group seeks liquidity as debt costs remain high
The move comes after the Reserve Bank of India rejected Tata Sons' application in September to surrender its registration as a core investment company.
The decision has brought the possibility of a Tata Sons listing back into focus, potentially providing the SP Group with another avenue to sell part of its holding.
However, people cited in the report said the SP Group does not want to wait for that process. It is seeking to unlock part of the value of its Tata Sons stake and use the proceeds to reduce expensive borrowings.
Lower debt could subsequently allow the group to refinance its remaining obligations at more favourable rates.
The group completed a ₹21,500-crore refinancing in July, but the transaction left it with significant borrowing costs.
The refinancing included about ₹15,200 crore of three-year rupee-denominated zero-coupon bonds carrying a 18.95% yield and a $650-million bond issued at a 14.5% yield.
Tata Sons stake remains key to refinancing plans
The SP Group ultimately wants to reduce its borrowing costs from around 18-19% to about 12%. Lenders have sought progress on monetising the Tata Sons stake before considering further refinancing or changes to loan-to-value requirements.
The group also had a ₹3,500-crore repayment obligation due by the end of September linked to an earlier financing arrangement.
The Tata Sons holding has supported several rounds of borrowing by the Mistry family. Sterling Investments raised about $2.6 billion in 2021 against its stake, while Goswami Infratech raised ₹14,300 crore through debentures in 2023.
The Mistry family holds about 18.4% of Tata Sons through investment companies, making it the holding company's largest minority shareholder.
