Tata Sons Stake At Risk? SP Group Faces ₹3,500 Crore Repayment Deadline

The Shapoorji Pallonji (SP) Group faces a fresh repayment obligation of around ₹3,500 crore by the end of September 2026. Lenders warn that failure to meet this deadline could be construed as an event of default,  Moneycontrol reported citing people familiar with the matter.

It remains unclear if the conglomerate has secured the necessary funds, and queries sent to the group went unanswered.

The group planned to fund the payment from the ₹21,500-crore refinancing package executed in July, which was primarily intended to settle existing promoter-level debt.

However, the conglomerate retained a portion of those funds to address its own requirements rather than paying the earlier bondholders in full.

Lenders said making the ₹3,500 crore payment will immediately enhance the collateral backing the borrowings. The transaction would lower the loan-to-value (LTV) ratio on the debt exposure from 40 per cent to approximately 32 per cent.

Structure of July Refinancing

The July ₹21,500-crore refinancing was secured largely against the group's holding in Tata Sons. The transaction comprised ₹15,200 crore of three-year rupee-denominated zero-coupon bonds issued by Eqyizen Investment at an 18.95 per cent yield.

It also included a $650mn dollar bond issued by Mercury Finance at a 14.5 per cent yield, with Deutsche Bank acting as the sole arranger.

The dollar bond attracted major institutional investors including BlackRock, Deutsche Bank, AllianceBernstein, Goldman Sachs Asset Management and Centiva Capital.

The conglomerate has a long history of raising funds against its Tata Sons shares. Borrowing began with a $200mn loan, or about ₹1,400 crore at the time, provided by Deutsche Bank in January 2020 to Mistry family entities Sterling Investments and Cyrus Investments.

This escalated in 2021 when Sterling Investment raised $2.6bn from Ares Management and Farallon Capital against its roughly 9 per cent holding. 

In June 2023, group entity Goswami Infratech raised ₹14,300 crore through zero-coupon non-convertible debentures backed by Cyrus Investments' 9.18 per cent stake. Investors included Cerberus Capital, Davidson Kempner, Varde Partners, Canyon Capital, Deutsche Bank and Ares SSG. The group later used proceeds from the Afcons Infrastructure IPO and the sale of Gopalpur Port to reduce part of these obligations.

In May 2025, the group raised about $3.4bn through Porteast Investment in another private-credit refinancing involving Ares, Cerberus, Davidson Kempner, Farallon and Deutsche Bank.

This three-year financing carried a yield of around 19.75 per cent. As the derived value of the collateral shares dropped this year, Porteast's lenders temporarily increased the permitted LTV limit from 34 per cent to 40 per cent to provide additional headroom.

Leveraging Tata Sons Stake

The Mistry family owns around 18.4 per cent of Tata Sons, making SP Group the holding company's largest minority shareholder.

Sterling Investments and Cyrus Investments hold these shares, which serve as the core collateral for promoter-level debt.

Lenders now expect SP Group to reach some form of memorandum of understanding or arrangement with Tata Sons over a potential liquidity event involving the stake, working with a timeframe of around 12 months, the people said.

The latest bond structure contains milestones around potential monetisation of the Tata Sons holding. A sales note reviewed by Moneycontrol reported that a "resolution, heads of terms for a transaction or an IPO announcement" involving Tata Sons must occur within 18 months of issuance. The agreements also mandate a separate ₹11,275 crore repayment within 24 months.