The fifth seed Indian pair, making its debut as a pair at the elite event, lost the title clash 5-7 6-3 3-10 to the sixth seeded combine in one hour and 30 minutes.
No Indian pair has ever won the year-end finale although Leander Paes and Bhupathi reached the finals thrice together.
Now it's the fifth time that Bhupathi has ended runners-up at the event, where world's top-8 teams compete for the championship. With Paes he ended runner-up in 1997, 1999 and 2000 and with Max Mirnyi in 2010.
Bhupathi and Bopanna had beaten Paes and his Czech partner in the semifinals.
They end the 2012 season and their partnership with two titles -- Dubai and the Paris Masters.
Bhupathi will partner Daniel Nestor in the next season while Bopanna is yet to confirm his teammate for the next season.
Granollers and Lopez became the second Spanish team to win the season-ending championships. The only other Spanish duo to win the championship are Juan Gisbert Sr and Manuel Orantes in 1975 at Stockholm.
The Spaniards took a 2-1 lead in the first set, after Granollers hit three successive forehands at Bopanna, who hit a backhand volley into the net on the deciding point.
However, Lopez was broken in the next game. At 5-5, Bhupathi mis-placed two serves to fall to 0/30. The 38-year-old Bhupathi made two further backhand volley errors, off Granollers forehands.
Serving for the set, Lopez faced sudden death deuce and break point, but Granollers intercepted a backhand volley to clinch the first set in 43 minutes.
Midway through the second set, at 3-4, the Indians set up two break point chances at 30/40. Lopez centred play on Bhupathi, less flashier and powerful than Bopanna, to recoup one points, but on the deciding point Granollers committed a forehand error.
Bopanna then closed out to 30 with the team's fifth ace of the set, which lasted 35 minutes.
Clever inter-play and defence by Granollers and Lopez gave them a 4-0 lead in the Match tie-break, in which Bhupathi and Bopanna could nor put away their volleys.
Soon the Spanish team was leading 9-3 and with Lopez serving for the match, Bhupathi hit a forehand volley long.