Cash strapped and under-capitalised, SP group faces biggest test ever

A shift from a low-risk project execution model to big bets on infrastructure and real estate projects has plunged the group into crisis

For over a century, the Shapoorji Pallonji group has been one of the country’s top construction firms and thanks to its 18.4 per cent stake in Tata Sons, one of the most influential as well. This dominance, however, did not really reflect in its business operations. The Mumbai-based group was financially conservative and preferred the low-risk model of project execution rather than asset ownership that may demand big-ticket investments.

Around five years ago the group decided to shift gear. “A confluence of lower fiscal and current account deficits, declining inflation, benign commodity price outlook and structural reforms shall boost investments,”