SP group back in business as fortunes revive in post pandemic era
29/06/2022
Mumbai, jun 28: Shapoorji Pallonji and Company Private Limited, the flagship company of the 150-year old SP group, has successfully exited from the one-time debt restructuring scheme by selling part of its assets and pledging part of its stake in the group's investment companies.
The company turned around in fiscal 2022 after its real estate business was impacted by the Covid pandemic in fiscal 2021. Experts say the group is now back in action with Pallonji Mistry's sons leading its businesses. In early 2012, Pallonji Mistry had handed over the day-to-day operations of the group to his elder son Shapoor while his younger son, Cyrus, took over as executive Chairman of Tata Sons, the biggest conglomerate in India, in the same year in October. Pallonji Mistry had divided his stakes in various investment companies equally between his two sons quite early. Most of the groups' construction and real estate businesses are held by SPCPL as subsidiaries and joint ventures, but fell into a financial crisis due to the Covid-19 pandemic in March 2020. As the cash flows from its real estate projects dried up, the flagship company opted for debt restructuring under Reserve Bank of India guidelines issued in August/September 2020. In April this year, the group said it settled the company's debt with its lenders by making a one-time payment of Rs 12,450 crore to 22 of them, leaving its balance sheet with a Rs 3,600 crore loan.
The promoters also raised about Rs 11,000 crore by pledging stakes in the investment companies that are holding shares in Tata Sons.
The family owns 18.4 per cent in Tata Sons. The net worth of the Pallonji family has been pegged at $29 billion by Bloomberg, after taking into account its stake in Tata Sons and the construction business.
At Rs 12,450 crore, Shapoorji Pallonji & Company's one-time settlement was the largest in the system. The group had sought two years for settling its dues but managed to come out of it within a year, experts said. According to company filings, it made a profit of Rs 337 crore on revenues of Rs 7,583 crore in FY22, compared to a loss of Rs 1,396 crore on revenues of Rs 6,457 crore in the pandemic hit fiscal year ending March 2021.
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