Special situations investor SSG Capital Management has bought nearly 47% stake in Shapoorji Pallonji Finance Pvt. Ltd (SPFPL), a non-banking finance company part of the Shapoorji Pallonji group.
With this, SSG Capital enters the senior secured credit space, which has also attracted several private equity backed NBFCs. Senior secured credit is essentially loans which are backed by collateral. SSG Capital has so far largely focussed on distressed debt transactions in India.
Emails sent to SSG Capital and Shapoorji Pallonji Group remained unanswered until press time on Wednesday.
A recent Crisil credit rating report said SSG became an Shapoorji Pallonji Finance shareholder on 16 March, and invested Rs132 crore through a rights issue on 28 March.
Founded in 1994, Shapoorji Pallonji Finance was inactive till last year when it began lending. Its loan book mainly has corporate clients and stood at Rs317 crore on 31 December last year.
According to a Shapoorji Pallonji group official who did not wish to be identified, the group could induct more investors in the company as it aims to diversify its product portfolio.
Shapoorji Pallonji Finance is headed by CEO Sanjay Hinduja who had joined in 2014 from Everstone Capital backed Indostar Capital Finance Ltd.
As per the terms of agreement, SP group will have board control and management control over Shapoorji Pallonji Finance, irrespective of the level of stake held in Shapoorji Pallonji Finance. Further, it will always carry the “Shapoorji Pallonji” brand even if the shareholding comes down.
The Shapoorji Pallonji group is a diversified conglomerate specializing in construction, design & build and EPC and employs more than 60,00 employees. It reported a revenues of Rs8,217 crores in fiscal 2017. The investment by SSG in Shapoorji Pallonji Finance isn’t, however, the first time that it has explored partnership with Shapoorji Pallonji group.
Mint reported in September last year that the two companies were contemplating a joint bid for power transmission tower maker Jyoti Structures Ltd.
Sterling and Wilson Pvt. Ltd (SWPL), a unit of Shapoorji Pallonji, will bid jointly with SSG Capital for a controlling stake in Jyoti Structures, Mint had reported citing the people cited above said on condition of anonymity.
Sterling and Wilson is an EPC company engaged in mechanical, electrical and solar industries.
Founded in 2009 by Edwin Wong, Andreas Vourloumis and Shyam Maheshwari, SSG Capital has a focus on China, India and South-East Asia. Mint had reported in July last year that SSG was raising close to $2 billion across two Asia-focused funds for two strategies which include special situations and private credit.
Source: Mint