Shapoorji Pallonji Group: Suvita Real Estates plans NCD issue to raise Rs 105 crore
Mumbai, February 8, 2024
Suvita Real Estates, a subsidiary of the prestigious Shapoorji Pallonji Group, has announced its plans to raise Rs 105 crore through the issuance of non-convertible debentures (NCD). The funds will be utilized to repay existing debt obligations, according to sources familiar with the matter.
High-Yield Bonds
The returns offered by the NCDs are significantly higher than risk-free rates, qualifying them as high-yield bonds or junk bonds. Investment to these NCDs is attractive due to its lucrative yield rates.
Step-Up Pricing
The terms of the NCDs reveal that Suvita Real Estates will pay investors a return of 17.25% for the first 12 months and 20.25% between the 13th and 15th months. Moreover, the company will have the option to redeem the maturing bonds at the end of the 12-month duration. In case of default, the company is obliged to pay a return of 24% to its investors.
Anchor Investor: Blackrock Asia Pacific Credit Opportunities Fund
Last September, Suvita Real Estates missed payments to Blackrock Asia Pacific Credit Opportunities Fund. Consequently, the company intends to utilize the proceeds from the issued NCDs to fulfill this debt obligation.
Subscription Dates
The subscription for these secured listed bonds will open on February 9, 2024, and is set to close on the same day. Investors will have a limited window to attain these attractive investment opportunities.
Shapoorji Pallonji Group
The Shapoorji Pallonji Group is a renowned business conglomerate with a diverse portfolio of ventures across various sectors, including real estate, infrastructure, and more. The group aims to maintain its commitment to excellence and ground-breaking pursuits in different industries.
These NCDs present a unique investment opportunity within the real estate sector, however, interested investors must exercise due diligence and carefully consider the risks associated with high-yield-junk bonds. Overall, this development showcases Suvita Real Estates’ financial strategy to manage its debt obligations and move forward with its growth plans.
