Shapoorji Pallonji Group is known for being a multi-trading company. The group has operated in various sectors like real estate, construction, publications, shipping, home appliances, engineered goods, textiles, biotechnology, and power, a long list of operations.
Shapoorji Pallonji Group is considered to be one of the most valuable private enterprises in India. The company was founded 156 years ago in 1865 by Pallonji Mistry.
The company has its hand in building some of the landmarks like Jumeirah Lake Tower in Dubai, Ebene Cyber City in Mauritius, and even after the Mumbai attack, they made the renovation and repairs of Taj Hotel.
After investing in various sectors, the group now wants to focus mainly on the core business, real estate, and construction, which led them to the debt of Rs 10,900 crore.
To clear off the debt, the Shapoorji Pallonji Group announced the sale of Eureka Forbes, which lay under the consumer business of the group Advent International, an American Private Equity Fund for Rs 4,400 crore.
The buyers will hold the 72.56% stake in the business, leading them to fall under the standalone company.
This deal worth Rs 4,400 crore will help the group to clear off the debt. According to the sources, the Eureka Forbes company will be a standalone company from now onwards, and it will be listed on the BSE. The Advent will take over the majority of the control from the Shapoorji Pallonji Group.
Eureka Forbes has its operations in vacuum cleaning, water purification, health, and safety solution. The executive director at Shapoorji Pallonji and Company Pvt. Ltd. said that a part of the SP Group, Eureka Forbes, has found a new home under Advent International, and this deal was considered for the betterment and growth in the core business of construction and real estate.
For this deal, Standard Chartered Bank played the role of the financial advisor. But at present, Shapoorji Pallonji Group stands with a debt of more than Rs 20,000 crore. Pallonji Group brought this business from the Tata Group two decades earlier. Shapoorji Pallonji Group holds 18.37% of the partnership in the Tata Sons.
After Cyrus Mistry was removed from the post of Chairman in 2016, the relation between Tata and Pallonji Group deteriorated. In 2019, it was decided to sell the business, and Standard Chartered Bank was allowed to sell it.
At the same time, Advent International and a Sweden company named Electrolux were competing to buy the Eureka Forbes. Still, as we say, the final move decides the winner, so Advent hired Nomura for the advisory and took the deal with them.
In the past 14 years, Advent International has invested more than $2.2 Billion in approx sixteen companies in India in the sector of financial services, healthcare, consumer products, industrial, and technology. The earlier four consumer sector investments were made in companies like Crompton Greaves Consumer Electricals, Dixcy Textiles, DFM Foods, and Enamor.