Shapoorji Pallonji Group Faces $1.2 Billion Debt Repayment by December

The Shapoorji Pallonji (SP) Group is staring at a $1.2 billion debt repayment deadline by December 2025, with its entire stake in Tata Sons pledged as collateral. According to people familiar with the matter, the group refinanced around $3.2 billion of earlier borrowings, and the upcoming tranche — including both principal and interest — is due within the next two months.

The Mistry family, which controls the SP Group, reportedly holds promoter-level debt estimated at ₹25,000–30,000 crore, about half of the group’s total debt of ₹55,000–60,000 crore. However, raising funds for this repayment could prove challenging, complicating the group’s plans to sell its 18% stake in Tata Sons, the holding company of the Tata Group.

Tata Sons Stake Pledged, But Hard to Monetise

While the Tata Sons shares have been pledged as security, experts note that invoking this pledge may not offer lenders an easy route to recovery.

“Tata Sons is an unlisted company, and its shares cannot be sold to external buyers without Tata Group’s consent,” said a person aware of the matter.

This makes it difficult for lenders to liquidate the collateral even if the group defaults. So far, the Tata Group has not shown interest in buying out the SP Group’s stake, leaving the Mistry family with limited options to unlock liquidity.

Lenders are reportedly seeking additional collateral or clarity on SP Group’s asset monetisation plans, including how it intends to use the Tata Sons shares in its repayment strategy.

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Public Listing Could Be a Way Out

People close to the developments said that the SP Group continues to believe that a public listing of Tata Sons would be the most transparent and value-accretive exit for all shareholders.

A listing would enable the group to liquidate its holdings through the market, allowing fair price discovery and tax efficiency. Under current rules, selling the stake to Tata Sons directly would attract a 36% capital gains tax, while a public listing would lower the tax burden to around 12%.

However, a Tata Sons IPO remains uncertain, and the timeline for such a move has not been made public.

Complex Debt Structure and Refinancing Efforts

The SP Group’s debt is spread across several promoter entities. A large portion is linked to Sterling Investments Pvt Ltd, which holds over 9% in Tata Sons. In 2021, Sterling Investments had raised $2.6 billion from Ares Management and Farallon Capital, with a loan tenor of three and a half years.

Earlier this year, the group refinanced $3.2 billion of its outstanding debt, led by Davidson Kempner and Cerberus Capital, with continued participation from Farallon Capital and Ares Management, who rolled over parts of their maturing loans.

The group also explored refinancing options with Power Finance Corporation (PFC) at a lower interest rate. However, PFC’s Investment Committee did not approve the proposal for unspecified reasons, sources said.

Asset Sales and Repayments So Far

To reduce its financial burden, the SP Group has sold multiple assets and repaid a significant portion of its earlier dues. Goswami Infratech, one of the group’s subsidiaries, reportedly repaid about ₹14,300 crore through proceeds from the IPO of Afcons Infrastructure and the sale of its stake in Gopalpur Port to the Adani Group.

Despite these efforts, the group’s upcoming repayment remains a major challenge, especially given the unlisted nature of Tata Sons shares — its largest and most valuable asset.

Outlook: High Stakes and Limited Options

As the December deadline approaches, the Shapoorji Pallonji Group faces rising pressure to find a workable solution. Its debt-backed stake in Tata Sons, while valuable, is not easily monetisable.

The group’s next steps — whether through fresh refinancing, strategic asset sales, or negotiations for a Tata Sons listing — will determine how it navigates one of its biggest financial tests in recent years.

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