Tata Capital anchors Rs 2,300-cr Jayaswal Neco

Mumbai: Tata Capital has led a ₹2,300-crore refinancing of Jayaswal Neco Industries' debt, providing an exit to Edelweiss Alternatives last week, according to people familiar with the transaction.The refinancing was anchored by Tata Capital with a commitment of about ₹800 crore, alongside Investec at ₹300 crore. Other lenders and investors in the syndicate include Vivriti Capital (₹200 crore), Hero FinCorp, Hero Corp, DSP, Oxyzo and a clutch of family offices, taking the total deal size to around ₹2,300 crore.Hero FinCorp is understood to have invested around ₹300 crore, while DSP has committed about ₹175 crore. Smaller family offices have chipped in roughly ₹75 crore. The entire syndicate has come in at a return of around 12.5%, people cited above said. Tata Capital has also earned a syndication fee of the deal size.125965638 Tata Capital and Jayaswal Neco did not immediately respond to requests for comment while others could not be reached.The refinancing replaces an earlier structure in which Edelweiss Alternatives was the primary lender to the asset. Edelweiss is said to have earned a total return of about 19% over the life of its investment, which was refinanced within two to three years. Jayaswal Neco exercised its early repayment option and fully redeemed the high-cost outstanding debentures, along with the final interest due, on December 14. The company has been steadily improving its credit profile by prepaying principal and accrued interest using internal cash accruals.The exit further adds to the track record of Edelweiss Alternatives' second performing credit fund, a $900 million fund focused on companies which are lower rated. Jayaswal Neco was among 17 deals executed from the fund, of which 13 have already been exited. Four investments remain, with exits expected in another 12 to 18 months. The fund has delivered returns of more than 18%, which has led to the company raising another $1 billion private credit."Our performing private credit strategy Edelweiss Special Opportunities Fund (ESOF-III) has recently exited from Jayaswal Neco, where the ESOF strategy aims at investing ₹300-1,000 crore with large corporates generating superior risk-adjusted returns through contracted debt returns plus upside sharing," said Amit Agarwal, CEO, EAAA Alternatives (earlier known as Edelweiss Alternatives). "Our current gross returns are 18%+. This was one of the larger investments in the fund and has successfully been refinanced within two years of investment."Jayaswal Neco's refinancing will lower borrowing costs and extend maturities, with promoters pledging their entire 55.2% stake as collateral. Half of the pledge is expected to be released once 50% of the debt is repaid, improving balance-sheet flexibility.The steelmaker had faced financial stress between FY14 and FY18 and was referred to the NCLT in 2018 by a bank consortium led by State Bank of India, though it avoided insolvency proceedings. The lenders later sold the loans to ACRE-managed trusts, leading to a restructuring that became effective in May 2022. Jayaswal Neco exited the restructuring by refinancing the debt through non-convertible debentures in December 2023.