SP Group repays Rs 3,500 crore to bondholders after securing fresh loans from existing lenders

Fresh updates from the financial markets indicate that The Shapoorji Pallonji (SP) Group has repaid around Rs 3,500 crore to its bondholders after a majority of its existing lenders agreed to extend fresh loans, enabling the Mistry family-controlled conglomerate to meet a crucial September repayment deadline and avert a potential default, people aware of the development told Moneycontrol.

The repayment provides immediate relief to the group, which had been negotiating with lenders to meet the obligation barely two months after completing a Rs 21,500-crore refinancing exercise in July.

Moneycontrol had noted on August 27 that SP Group faced a repayment obligation of approximately Rs 3,500 crore by September-end, failure to meet which could have triggered an event of default under its financing arrangements.

The amount was payable to holders of bonds issued under an earlier financing arrangement and was anticipated to be settled from the proceeds of the July refinancing.

The latest arrangement was finalised after a majority of existing lenders agreed to provide fresh financing, allowing the group to settle its dues within the stipulated deadline, the people cited above stated.

An email sent to SP Group seeking comments on the repayment and the fresh financing arrangement remained unanswered at the time of publication. While the repayment removes an immediate financial hurdle, it does not represent an equivalent reduction in SP Group's overall debt, since the obligation has been met through fresh borrowing.

The September repayment was linked to an earlier financing undertaken through Porteast Investment, an SP Group entity that boosted approximately Rs 28,500 crore through bonds in May 2025, backed by the group's holding in Tata Sons.

The borrowing carried an annual yield of around 19.75 percent, reflecting the high cost at which the group has been raising funds against its privately held Tata Sons shares.

In July 2026, SP Group completed another refinancing exercise, raising approximately Rs 21,500 crore to replace existing promoter-level borrowings.

The transaction comprised around Rs 15,200 crore of three-year indian rupee-denominated bonds issued by Eqyizen Investment at a yield of 18.95 percent and a separate $650-million bond issued by Mercury Finance at a yield of 14.5 percent.

The July 2026 refinancing was intended to address existing repayment obligations and provide the group with additional time to pursue a longer-term solution to its debt burden.

The latest repayment provides immediate relief but additionally underlines the group's continued reliance on refinancing to manage its obligations.

Moneycontrol had earlier noted that SP Group was looking to reduce its borrowing costs from around 18-19 percent to closer to 12 percent through a future refinancing, once restrictions on early repayment under the July transaction expire.

The group's borrowing programme has involved multiple financing exercises backed by its Tata Sons holding, with lenders seeking greater visibility on how the conglomerate intends to repay its obligations over the longer term.

The longer-term solution to SP Group's debt burden stays closely tied to its approximately 18.4 percent holding in Tata Sons, the privately held holding firm of the Tata Group.

The Mistry family is Tata Sons' largest minority shareholder, with its investment held largely through Sterling Investments and Cyrus Investments. The stake has been central to several financing exercises undertaken by the group.

Moneycontrol had noted in August that lenders were looking for progress towards a possible transaction involving the holding, rather than another round of refinancing.

The July financing additionally contains milestones linked to such a transaction. A sales note reviewed by Moneycontrol requires a resolution, agreement on transaction terms or an IPO announcement involving Tata Sons within 18 months of issuance. It additionally provides for repayment of Rs 11,275 crore within 24 months.

The offering has advanced significance following the Reserve Bank of India's September 11 decision rejecting Tata Sons' application to surrender its registration as a core investment firm and directing it to comply with the applicable regulatory requirements.

SP Group chairman Shapoorji Pallonji Mistry subsequently welcomed the RBI's decision and backed a public stock-exchange debut of Tata Sons. Tata Trusts, which controls approximately 66 percent of Tata Sons, has maintained that alternatives to a stock-exchange debut should additionally be explored.

A stock-exchange debut or a negotiated sale of part of its holding could provide SP Group with a route to repay debt and reduce its reliance on expensive borrowing. That stated, the structure and timing of any such transaction stay uncertain.

For now, the successful Rs 3,500-crore repayment removes the immediate threat of a September default. The longer-term challenge for SP Group stays finding a sustainable way to reduce its debt and unlock value from its Tata Sons investment.