Shapoorji Pallonji seeks up to $200 million in private credit to ease debt

The Shapoorji Pallonji (SP) Group is in early discussions to raise between $150 million and $200 million through private credit, according to people familiar with the matter, as the Mistry family-controlled conglomerate works to ease mounting debt obligations. The report was published on 29 October 2026.

The group plans to issue rupee-denominated bonds similar to those sold earlier this year by its unit Eqyizen Investment Pvt. in July. Around half of the proceeds would be used to repay creditors of Porteast Investment Ltd., another group entity. The remainder would go towards other debt across the conglomerate. The people said the financing is expected to reduce debt at Porteast and ease pressure on the group's loan-to-value ratio, which measures debt against the value of its assets.

The group is targeting completion by mid-November. The people cautioned that talks are at an early stage and that the final amount and terms could change. The group's on-record comment on the financing was not available at the time of writing.

A pattern of large private credit raises

The proposed raise follows a larger round. The group raised around ₹4,450 crore, or roughly $460-470 million depending on the exchange rate used, through Eqyizen and a dollar bond issue by another unit, Mercury Finance Co. The proceeds were used to meet amortisation payments due at Porteast. In May 2025, a person familiar with the matter said the group had signed a $3.4 billion private credit deal, which was described as the biggest of its kind in the country.

Private credit is generally more expensive than traditional bank lending. The reliance on it shows how much the group needs to keep liquidity flowing while it manages its debt structure. The group's total debt has been estimated at between ₹55,000 crore and ₹60,000 crore in reports cited earlier in the year.

The Tata Sons stake

The group's larger plan centres on its holding of about 18.4% in Tata Sons, which makes it the holding company's second-largest shareholder. Tata Trusts chairman Noel N Tata placed a proposal before the Tata Sons board on 17 September 2026 to provide at least ₹25,000 crore of liquidity to the SP Group through the monetisation of part of that stake. Under the proposal, Sterling Investments Corporation Pvt. Ltd. and Cyrus Investments Pvt. Ltd., which hold the SP Group's Tata Sons shares, would sell enough shares to generate gross proceeds of at least ₹25,000 crore.

The sale would be completed in two tranches over 18 months, with the share valuation set under Rule 11UA of the Income Tax Rules, 1962. Tata Sons would start a selective capital reduction process before the National Company Law Tribunal. Because Tata Sons is unlisted, the stake has been hard to sell at a market price. Reports say the board asked on 21 October 2026 for the plan to be taken up at its next meeting, but no date for that meeting has been announced, and no final agreement has been reached.

For investors tracking the group's exposure, the key points are the size of the new borrowing, whether it is used to retire the Porteast creditors as planned, and whether the Tata Sons proposal moves from a board discussion to a formal agreement. Any deal would need scrutiny of valuation, treatment of shareholders, funding and regulatory approvals.

The next step to watch is whether the group confirms the size and terms of the rupee-bond raise before mid-November, and whether the Tata Sons board sets a date to take up the monetisation plan.