SP Group is reportedly in talks to raise about ₹25,000 crore through a fresh issue of two-year, unlisted and unrated non-convertible debentures (NCDs), aiming for an internal rate of return (IRR) of 14–15 per cent.
This move comes as the group explores ways to monetise its 18.37 per cent stake in Tata Sons — including a possible listing, external investor entry, share-buyback or share-swap. SP Group and its bankers believe that a successful exit or monetisation of the stake could reduce its overall borrowing cost.
The NCDs under discussion follow a previous tranche issued about five months ago, which carried a much higher yield (~ 19.75 % IRR), but currently trades around 16.5–17.0 % IRR — reflecting tighter pricing conditions amid improving investor sentiment over SP Group’s stake monetisation prospects.
SP Group is reportedly engaging global and Middle-East / Japanese banks and institutional investors for these debentures, suggesting strong interest from lenders willing to take on higher risk for higher return.
Investors and analysts note this issuance could be part of a broader refinancing plan. SP Group has in the past raised private-credit and bond funding to refinance its existing debt — a pattern that continues with this new proposal.
What to Watch / Key Risks
- The NCDs are unrated and unlisted, meaning no formal credit rating and limited public disclosures — which makes assessing default risk harder.
- SP Group’s borrowing is tied to its Tata-Sons stake — if monetisation plans are delayed or fail, debt servicing could come under pressure.
- Historical context: earlier high-yield NCDs from SP Group (via a subsidiary) had experienced rating downgrades and covenant breaches — highlighting underlying refinancing and liquidity stress.
