Afcons Infrastructure shares surged as much as 17.7% in intraday trade on Tuesday, with the stock rebounding sharply after last week's selloff. The rally is being driven primarily by renewed expectations that Tata Sons will be listed, a development that could give the heavily leveraged Shapoorji Pallonji Group a clearer route to monetise its stake in the Tata holding company.
Afcons touched an intraday high of Rs 304.55, against a low of Rs 268.70, and was trading around Rs 298.65, up 17.67%, according to the chart.
The catalyst is the Reserve Bank of India's rejection of Tata Sons' request to surrender its registration as a core investment company. The decision leaves Tata Sons closer to a stock-market listing under the RBI's upper-layer NBFC framework.
That has significant implications for the Shapoorji Pallonji Group, which owns around 18.37% of Tata Sons. The group has historically used the stake as collateral for borrowings, making the eventual monetisation of the holding important to its deleveraging and refinancing plans.
The improved visibility around a Tata Sons listing is already being viewed by lenders and investors as a potential improvement in SP Group's ability to meet its debt obligations. The group is estimated to have around Rs 55,000–60,000 crore of debt, while a recent refinancing exercise involved about Rs 21,500 crore at borrowing costs of roughly 18–19%.
The group is also facing a Rs 3,500 crore repayment due by the end of September, with reports saying it is weighing refinancing or an extension. The renewed Tata Sons listing prospects could improve lenders' confidence in the group's ability to monetise its Tata holding.
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