Archive · 19 May 2025
Shapoorji Pallonji Seeks Relief on Capital Rules from RBI
Imagine a company, Shapoorji Pallonji, that borrowed a lot of money.
They used a part of their investment company, Sterling, as collateral.
Now, because of new rules, Sterling needs to have more money saved up.
Shapoorji Pallonji is asking the bank, the RBI, for more time to meet these new rules.
They're hoping the RBI gives them three more years.
If they don't get the extra time, they might not be able to pay back their loan.
They also plan to sell some real estate to raise money and help their situation.
Shapoorji Pallonji Group seeks a three-year extension from RBI for Sterling Investment Corp to meet capital adequacy norms.
Sterling Investment Corp was recently reclassified, facing stricter regulatory requirements as a mid-layer NBFC.
The group recently raised Rs 28,500 crore ($3.3 billion) backed by Sterling's stake in Tata Sons.
Failure to secure RBI approval within four months would constitute a default on the borrowing.
The group also seeks support from RBI for a public listing of Tata Sons.
- Who
- Shapoorji Pallonji Group and Sterling Investment Corp, with involvement from the Reserve Bank of India (RBI) and lenders including Ares Management and Deutsche Bank.
- What
- Shapoorji Pallonji seeks a three-year extension from RBI to meet capital adequacy norms for Sterling Investment Corp, related to a recent bond issue.
- When
- The deal was signed on May 15th, with settlement expected on May 21st; the group must secure RBI approval within four months.
- Where
- India.
- Why
- To avoid defaulting on a bond issue, due to stricter regulatory requirements after Sterling Investment Corp was reclassified as a mid-layer NBFC.
- Stake in Tata Sons
- 18.37% held by SP Group and 9.18% held by Sterling Investment Corp.
- Bond Issue Amount
- Rs 28,500 crore ($3.3 billion)
- Repayment Obligation
- Rs 51,000 crore after three years.
- Interest Rate
- 19.75%
- Loan-to-Value Ratio
- 14.7%
- Collateral
- Shares of Tata Sons and Shapoorji Pallonji Real Estate.