SP Group, cash strapped and under-capitalised after betting on infra sector

SPCPL's consolidated revenue nearly doubled between FY16 and FY19 - the latest year for which its finances are available - growing at a compound annual growth rate of 24 per cent

Did Shapoorji Pallonji (SP) Group overestimate the growth potential in India’s infrastructure sector and underplay the financial risks involved in betting big on this cash-guzzling sector?

“The development momentum has picked up. There is good visibility of opportunities in roads, Railways, mass rapid transit system, ports, and related segments. This creates optimism among Indian construction companies,” reads Afcons Infrastructure’s — one the largest SP Group companies — annual report for 2015-16 (FY16), detailing the growth possibilities ahead.

A civil construction firm, Afcons Infrastructure is 68.2-per cent owned by Shapoorji Pallonji & Company (SPCPL) and accounted for 18 per cent of