Shapoorji Pallonji's Joyville sells 800 housing units in Pune for Rs 400 cr

 Businessconglomerate Shapoorji Pallonji's mid-income housing platform Joyville has sold over 800 units in its new housing project in Pune for around Rs 400 crore on improved demand post lockdown.

Last month, the company had said it would invest around Rs 1,200 crore to develop a new residential project in Pune.

Joyville is a USD 200 million platform by Shapoorji Pallonji Group, ADB, IFC and Actis to develop aspirational housing projects in India.

Shapoorji Pallonji has sold over 800 apartments.These flats have been sold in a price range of Rs37.5 lakhto Rs 78 Lakh, the company said in a statement on Monday.

Sources said the total sales bookings in value terms would be around Rs 400 crore.

The company witnessed high traction from home buyers during the launch period and received around 1,500 Expression of Interests (EoI).

Housing demand has improved from July onwards after it was affected severely during April-June period due to the COVID-19 pandemic.

Venkatesh Gopalkrishnan, CEO of Shapoorji Pallonji Real Estate, said The success of the project validates the trust of our valued homebuyers on the brand Shapoorji Pallonji and its 155-years of legacy."

Shapoorji Pallonji last month launched a 21-acre housing project in East Pune. The project 'Joyville Hadapsar Annexe' will be developed in phases.

The total units in this project will be more than 2,700. The 21-acre project is part of a larger development which is over 200 acre and houses the stud farm of the Shapoorji Pallonji family.

This is the second residential project in Pune under 'Joyville' brand. Joyville Hinjawadi (West Pune) was launched in 2018 and is completely sold out. Overall, this is the fifth project of Joyville.

The estimated cost of this new housing project is around Rs 1,200 crore, Sriram Mahadevan,MD of Joyville Shapoorji Housing, had told PTI last month.

"We have been noticing that over the past few years, there is a flight to quality by customers and COVID-19 has hastened the process further. Customers are looking forward to quality and trusted brands for reposing their faith for home purchase," Mahadevan said.

Shapoorji Pallonji Real Estate has a development pipeline ofover 80 million sq. ft and is looking to double its top line in the next 2 to 3 years. It is planning to launch new projects and new phases in its existing projects in MMR, Pune, Gurugram, Bangalore and Kolkata by this fiscal year.

Mistry group seeks to raise up to $1 billion pledging Tata Sons stake

The Shapoorji Pallonji Group, controlled by billionaire Pallonji Mistry and his family, is in preliminary discussions to borrow as much as $1 billion to repay maturing debt using part of its stake in Tata Sons as collateral, said people with knowledge of the matter.

Mistry, whose son Cyrus was ousted as chairman of Tata Sons in 2016, is the biggest single shareholder in India's largest conglomerate, and is seeking a loan as the coronavirus outbreak delays a plan to sell assets, the people said, asking not to be identified.

Mistry is trying to use his 18 per cent stake in Tata Sons, which is estimated to be worth as much as $14 billion, as the Covid-19 pandemic stalls economic activity across the world. However, he may face a hurdle: the shares in the unlisted Tata holding company are closely held and illiquid. A legal battle between Tata Sons and Cyrus Mistry following his ouster may also deter potential creditors.

A representative for Shapoorji Pallonji Group declined to comment.

Mistry's Shapoorji Pallonji & Co had Rs 9020 crore ($1.2 billion) of debt as of September 30, according to rating assessor ICRA. The company planned asset sales, including solar power plants and road assets, in a bid to reduce debt by as much as Rs 4,000 crore, a person with direct knowledge of the matter said in August.

Founded in 1865, the Shapoorji Pallonji group, which has built some of Mumbai's landmarks, including the RBI building, is still better placed than most of its corporate peers, with total revenue of $7 billion for the year ended March 2019.

The sun stops shining for Shapoorji Pallonji as solar company IPO falters

Interest rates could surge, exchange rates may collapse, the sun might stop shining brightly.

Every conceivable danger an investor needs to be aware of in an initial public offering is discussed in the August prospectus of Sterling and Wilson Solar Ltd., among the world’s biggest engineering contractors to solar farms. And yet, the risk that struck hapless shareholders was buried under related-party transactions on Page 37: that the Indian company’s storied founders won’t keep their promise.

The 42% carnage in Sterling and Wilson shares over three trading sessions in Mumbai is the story of this broken pledge. Controlling shareholders had promised to return with interest what they owe the business—but are now dragging their feet. That’s shabby treatment of minority investors, and that, too, within just three months of the firm being floated to the public. It’s also a cautionary tale about India’s beleaguered real estate industry and its inability to raise cash.

A debt-saddled India Inc. has bungled its cash-flow forecasts, triggering a $200-billion-plus bad loan problem. The stress in the banking system has filtered into the balance sheets of shadow financiers who provide the lifeblood of financing to the property industry. Their own funding under strain, these lenders have started mistrusting borrowers that not long ago were ranked among the bluest of chips.

The 154-year-old Shapoorji Pallonji Group, which constructed the Reserve Bank of India’s Mumbai headquarters as well as the Sultan of Oman’s palace, had given its word to IPO investors. In 90 days after the listing of Sterling and Wilson Solar, the founders—Shapoorji Pallonji and Company Pvt and partner Khurshed Daruvala—would return the loan of Rs 23 billion ($325 million) they had taken from the firm.

“What’s $325 million to these rich backers?” investors must have thought, as they wrote their IPO subscription checks. Pallonji Mistry, the 90-year-old patriarch of the group, now run by son Shapoor, is worth more than $20 billion, according to Bloomberg data. The privately held construction unit garners $1.75 billion in annual operating income, according to a rating agency estimate.

The solar company’s public issue went through, though it didn’t pull in as much money for the founders as the Mistry family had hoped for. Still, the group’s struggle to keep its IPO commitment became clear only late last week. Four days before the November 18 payment deadline, the founders wrote to the company’s board, asking for a more lenient payment schedule and a reduction in the principal amount, citing "significant and rapid deterioration in the credit markets." Shares in Sterling and Wilson Solar, a profitable business with a global order book, tanked.

More crucially, the Shapoorji Pallonji Group’s money problems gave Mumbai’s already-jittery financial community another reason to feel nervous. Several of India’s current and former billionaires are in trouble. But this isn’t just any tycoon. The Mistry family owns an 18.4% stake in India’s salt-to-software conglomerate Tata Group.

That shareholding is worth $14 billion. Or that’s what Pallonji Mistry’s younger son, Cyrus, claimed in a legal appeal after he was ousted as Tata Group chairman in a 2016 boardroom coup. It used to be child’s play to raise money against those shares. But as the fight rolled on, Tata Group amended its charter and became a private limited firm. That has presumably limited the liquidity of the Mistry family’s shareholding, even though rating firms don’t acknowledge any such loss of flexibility.

ChartPhoto source: Bloomberg

Then came the sudden collapse in September 2018 of highly rated infrastructure financier IL&FS Group. Funding for shadow banks froze up, forcing them to raise borrowing costs—particularly for real-estate players who were juggling long-term assets by rolling over short-term loans. ICRA Ltd., an affiliate of Moody’s Investors Service, said the Shapoorji Pallonji Group’s flagship construction firm was “exposed to refinancing risk.”

With the funding crunch in India’s credit markets showing no sign of abating, and the economy slowing sharply, managing that risk is getting tougher.

Listing the solar business was part of the group’s deleveraging plan. That it has gone so badly may affect the next attempt to slim down. A possible sale of Eureka Forbes Ltd., a water purifier business, could unravel if investors fear getting shortchanged again. If Eureka Forbes does seek outside money, bankers must highlight that risk, rather than speculate about a future in which the sun stops shining or water runs out. The present is dystopian enough.

Shapoorji Pallonji Group provides relief to Puri cyclone victims

Shapoorji Pallonji (SP) Group has reached out to the victims in Puri devastated by the cataclysmic storm Fani that pounded Odisha’s coast on May 3.

The Group’s executives visited the gram panchayats of Gandamunda Bhoi and Bila Bhoi under Puri Sadar block and distributed relief materials among the affected families.

The kits included a host of shelter items like tarpaulin and rope, household kit including plates and tumblers, sleeping mats, buckets and mugs, toiletries including soaps, towels, toothbrushes and toothpaste apart from mosquito coils and sanitary napkins. Also, chlorine tablets were provided to the families as groundwater in the area is feared to be contaminated.

Relief materials were distributed among 75 families. Villagers appreciated the efforts of the team as they felt the items in the kit will be helpful in maintaining normalcy in their lives.

Jagadish Chandra Rout, Associate Vice President, Corporate Affairs and Communications, Shapoorji Pallonji Port Maintenance Ltd said, “Shapoorji Pallonji Group is committed to the noble cause of serving the people of cyclone affected district of Puri. We always stand by the rebuilding process and development of the people of Odisha.”

The relief programme was hosted by the Group with support from Habitat for Humanity India and Mahashakthi Foundation.