Shapoorji Pallonji Group to raise $1 billion through 30% share sale of solar unit

The Shapoorji Pallonji Group has planned to raise around $1 billion by bringing outside investors into its solar unit. The company embarks on a series of asset sales across the 153-year-old conglomerate to reduce debt.

According to Bloomberg, businessman Pallonji Mistry will sell around 30% in the solar engineering arm of Sterling & Wilson Pvt., said Jai Mavani, executive director at conglomerate’s flagship company. The funds would be raised through a pre-listing stake sale followed by a public offering.

A separate listing of Eureka Forbes Ltd., the water purification unit of publicly-traded Forbes & Co., and sales of commercial real estate will also be considered, Mavani said. Part of the proceeds will be used to pare debt, he said.

“We have leveraged ourselves to the level that we believe is sustainable but, beyond a point, we want to create equity for ourselves,” Mavani said in a Nov. 15 interview. “Be it Sterling & Wilson or Eureka Forbes, their real value is a multiple of what’s in the balance sheet.”

The 400-billion-rupee ($5.6 billion) group, which built the Sultan of Oman’s palace and is now helming one of India’s biggest affordable home projects, plans to tap the market at a time when debt funding is getting scarcer after India’s worst liquidity crunch in two years.