Shapoorji Pallonji Group's Bold Move: New Real Estate Holding Firm Set to Go Public

The Shapoorji Pallonji Group has established a new holding company, Shapoorji Pallonji Real Estate (SPRE), to consolidate its real estate assets across India. According to The Economic Times, the group plans to monetize these assets by taking the firm public in the near future.

This move is designed to unlock value, streamline operations, and facilitate the monetization of a portfolio that includes over 2,000 acres of land, with assets estimated to be worth approximately $6 billion, the report highlighted.

“Creating a unified holding company and consolidating assets under this entity aligns with our strategic vision to streamline operations and enhance value creation,” stated Venkatesh Gopalakrishnan, managing director and CEO of SPRE. He further emphasized that SPRE is positioned to drive operational efficiencies and capitalize on growth opportunities by leveraging the scale of its diverse real estate portfolio.

Moneycontrol has not independently verified this report.

Gopalakrishnan, who leads the new company, reiterated that this strategy is part of the group's broader goal to streamline operations and enhance value creation. SPRE's objective is to harness its scale to bring together the group's diverse real estate holdings.

SPRE's portfolio includes the entire real estate assets of the group, comprising 45 land parcels and projects with a development potential of 140 million square feet. Currently, projects covering 22 million square feet are under development.

Gopalakrishnan mentioned that the portfolio could generate up to ₹2 lakh crore in revenue post-development, with the company considering a public offering within the next two years.

The company’s real estate assets are located in key urban centers like Mumbai, Pune, Bengaluru, Gurugram, and Kolkata, along with additional properties in Mysore and Nagpur. The portfolio features both high-density urban sites and extensive land tracts between Mumbai and Pune. SPRE is also managing approximately ₹6,500 crore in debt, primarily consisting of construction finance and asset-backed loans. Gopalakrishnan pointed out that this debt is strategically aligned with cash flows from ongoing and upcoming developments, with plans to reduce the debt by prepaying ₹2,500-3,000 crore within the year.

The revenue potential of the portfolio could reach up to ₹2 lakh crore after development. The consolidation effort is expected to strengthen the company’s capability to execute large projects, thereby providing transparency and maximizing returns, which boosts investor confidence, Gopalakrishnan added.

The company is reportedly planning to raise around $800-900 million initially through an IPO by offering a 10-12% stake. Further stake dilutions could increase the total capital raised to around $2 billion.

This ongoing restructuring is part of the Shapoorji Pallonji Group’s larger strategy to streamline business operations. By separating its various verticals, such as construction and real estate, the group aims to establish distinct capital structures and improve operational efficiency, similar to its earlier demerger of Eureka Forbes.

Additionally, SPRE plans to expand its middle-income housing segment, Joyville Shapoorji, with the intention of launching five new projects annually. Supported by major investors, including the World Bank’s IFC, Actis, and the Asian Development Bank, Joyville is expected to play a central role in SPRE’s growth strategy.

The formation of SPRE underscores the Shapoorji Pallonji Group’s commitment to achieving sustained growth in the real estate sector, leveraging its significant land bank and strategic financial planning to drive future success.