Shapoorji Pallonji Group Signs $3.4 Billion Private Credit Deal to Refinance Debt

The Shapoorji Pallonji Group, one of India’s oldest and most prominent real estate and construction conglomerates, has signed a $3.4 billion private credit agreement , the largest of its kind in the country to date. The deal, involving a three-year, zero-coupon rupee bond with an annual yield of 19.75%, represents a major development in India's fast-evolving private credit market. Proceeds from the bond issue will primarily be used to refinance existing debt.

According to Business Standard, a source familiar with the matter, the deal has been signed with a trustee and funds are expected to be disbursed shortly. Deutsche Bank is acting as the sole arranger and trustee for the deal. While the company has not made an official comment, industry insiders have confirmed that about a dozen large investors are participating, including global firms such as Ares Management Corp, Cerberus Capital Management, Davidson Kempner Capital Management, and Farallon Capital Management.

The transaction comes at a time when India’s private credit landscape is witnessing heightened activity. As demand for infrastructure funding grows under the central government’s focus on capital expenditure, developers and industrial houses are increasingly exploring non-traditional financing sources. Private credit, once seen as a niche alternative, is now gaining wider acceptance among borrowers seeking flexibility and speed in funding.

This deal signals the growing comfort of international investors in engaging with India’s private credit sector. Firms like KKR, Oaktree Capital, and Goldman Sachs have already scaled up their participation in the market, while domestic asset managers are also stepping up. Kotak Alternate Asset Managers, for instance, is planning to raise a $2 billion private credit fund. This convergence of global and local interest has intensified competition, giving borrowers access to a broader base of capital.

The Shapoorji Pallonji Group, a family-run business with roots dating back over 150 years, has diversified interests across construction, real estate, and infrastructure. It has been behind several landmark projects, including the Reserve Bank of India headquarters and the Al Alam Palace for the Sultan of Oman. The group has also expanded into international markets, with a growing presence in the Middle East and Africa.

The timing of the deal is notable. It coincides with a surge in large-scale debt activity in India. Mukesh Ambani-led Reliance Industries recently raised a $2.98 billion-equivalent loan, reportedly the largest loan for an Indian borrower in over a year. The Shapoorji deal not only surpasses that figure but also underscores the increasing significance of structured credit in meeting corporate financing needs.