In FY23, Shapoorji Pallonji -; Co. to reduce its debt by Rs4,000 crore

25 Aug 2022 , 08:35 AM

Through asset sales, Shapoorji Pallonji & Company (SPCPL) would further lower its debt in the current fiscal year (2022-23) by Rs4,000 crore. The Shapoorji Pallonji Group’s (SP Group) flagship firm, SPCPL, completed its one-time restructuring (OTR) plan in 2021—2022 (FY22) before being scheduled by repaying all of its OTR debt. In order to achieve this, money was infused by the promoters, assets were sold for money, and a new term loan was obtained.

During FY22, the company’s total external debt decreased by around Rs13,500 crore to Rs23,475 crore as of March 31. ICRA withdrew ratings from the watch with growing implications after making progress in the financial profile, particularly debt reduction, into account. With a “stable” outlook, the rating agency raised the term loan rating from “BBB+” to “A-.”

Of the total promoter debt of Rs3,900 crore, around Rs3,100 crore have been converted into mandatory convertible preference shares or perpetual debt. This contributed to the strengthening of its net worth position.

According to ICRA, the company must settle principal commitments of Rs1,500 crore between 2022—2024—25, of which Rs300 crore was paid in June. The remaining sum is anticipated to be mostly covered by the sale of stakes in several of its group entities. As of March 31, SPCPL had a sizable outstanding order book at Rs32,360 crore, providing income visibility over the next few months. The order book is also well-diversified across industries, regions, and clients.

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