Fintech lender Kinara Capital informed exchanges on Thursday that certain lenders have appropriated or set off fixed deposit receipts maintained by the company towards their respective facilities. Without naming the lenders or elaborating further, it stated that it is exploring “a mutually acceptable long-term resolution in the interest of all its stakeholders.”
As of now, fintech has not defaulted on any loans or bonds or interest payments.
A note issued by ICRA detailed the events that led to the crisis. It stated that “two lenders set off about Rs 81 crore from bank balances and encumbered fixed deposits against a portion of the borrowings outstanding, while recall notices to the extent of Rs 66 crore have been issued.”
The company’s free cash has declined from Rs 98 crore to Rs 70 crore, the note added.
ICRA stated that Kinara Capital is contemplating the sale of assets and corresponding transfer of liabilities. “This action by a few lenders could lead the other lenders to also trigger early redemption, which will significantly impact its liquidity profile in the near term,” ICRA said. As of June 2025, the company had a total debt of Rs 1,853 crore from 46 lenders. The rating agency has downgraded the company’s bonds and loans to ICRA C from ICRA BBB-, stating that the above developments could impair Kinara’s financial flexibility to continue its normal operations.
Following this development, two directors—Arvind Kodikal, nominee director, and Aiswarya Ravi, whole-time director—resigned.