Four Essel Group-linked companies have submitted settlement proposals to LIC Housing Finance Limited offering to repay 100 per cent of their outstanding principal along with 10 per cent interest, in a significant development in a long-running loan dispute tied to a personal guarantee by group founder Subhash Chandra. The proposals were submitted on 7 October 2026, according to reliable sources familiar with the matter.

The Loans in Question

Vasant Sagar Properties Limited and Pan India Infraprojects Private Limited, both associated with the Essel Group, had originally borrowed ₹500 crore from LIC Housing Finance. Separately, Digital Subscriber Management and Consultancy Services Private Limited and Sprit Infrapower Project had availed loans totalling ₹480 crore from the same lender.

All four companies have now proposed full repayment of the outstanding principal along with 10 per cent interest. These borrowings were backed by Subhash Chandra in his personal capacity as guarantor, sources said.

Chandra's Position on the Dispute

Chandra has consistently maintained that he did not personally borrow money from the lenders involved in the National Company Law Tribunal (NCLT) proceedings, and that his role was solely that of a personal guarantor for loans taken by entities associated with the broader Essel Group. He has also pushed back against reports suggesting he received a 99.97 per cent haircut on debt worth approximately ₹22,000 crore through insolvency proceedings.

In a statement, Chandra said the ₹22,006 crore figure widely reported represents total claims filed in the proceedings and 'does not reflect the current status of the matter.' He argued this amount should not be treated as his personal outstanding debt.

Breaking Down the Admitted Claims

According to Chandra, of the ₹22,006 crore in total claims filed, ₹21,696 crore were admitted by the resolution professional. However, he said lenders who objected to the repayment plan had claims totalling only ₹3,992 crore. Of that figure, claims worth ₹620 crore have already been settled, leaving an outstanding disputed amount of ₹3,372 crore.

Why This Settlement Matters

The offer of full principal repayment with interest is notable because insolvency proceedings before the NCLT often result in creditors accepting significant haircuts. A 100 per cent repayment proposal, if accepted, would represent a meaningful departure from that norm and could ease pressure on Chandra's personal guarantor liability. The development also comes at a time when lender scrutiny of personal guarantees has intensified following amendments to India's insolvency framework that brought guarantors within the ambit of NCLT proceedings.

What Happens Next

LIC Housing Finance has yet to formally respond to the settlement proposals. If accepted, the agreement would resolve dues tied to borrowings of at least ₹980 crore across the four companies. Observers will watch whether the lender accepts the terms or pushes for a court-supervised resolution through the NCLT process.