Private equity firms value SP Group stake in Tata Sons at hefty discount

PE players willing to offer credit are asking for two things - a personal guarantee from the SP family, and a pledge of shares in its own group companies.

Private equity (PE) funds are valuing the 18.4-per cent stake that Shapoorji Pallonji (SP) Group owns in Tata Sons at a discount ranging between 25 per cent and 40 per cent of its market value. The quantum of discount they want depends on whether they are offering credit lines to the group or seeking to buy their equity in the holding company.
 
PE funds offering credit lines to the group to pay off part of the latter’s loans have valued the shares at a discount of 25-35 per cent of the market value.
 
However, global PE funds looking