Lendingkart Finance Bonds: NCD Structure, Ratings & Risks

Introduction

Lendingkart Finance has issued NCDs that investors see on bond platforms with coupons of roughly 10.5% to 12.5% per annum. At the same time, three rating agencies now rate it AA- or A+ (two upgrades and one new rating since November 2025). That combination can look attractive, but the story behind the ratings is more complicated.

The company was a digital lender to small businesses. Since FY2025 it has had falling revenue, heavy losses, a change of control, a new management team and a shift in its lending model. According to the rating agencies, the ratings improved because a large parent took control and put in fresh capital, not because the business recovered.

This guide explains the company, what the ratings really say and where they differ, how its NCDs work, what has been outstanding, how the finances look up to the June 2026 quarter, the legal dispute with its founders, and the risks and checks that matter. Facts come from the rating agencies' own reports and the NCLT record. Recent results are taken from LFL's financial results filed with BSE.

Quick Overview

Fixed-income allocators comparing bank fixed deposits with corporate debentures often come across Lendingkart Finance NCDs, which carried coupons of about 10.5% to 12.5% per annum in the rating reports and ratings of AA- or A+. Lendingkart Finance Limited (LFL) is a non-deposit-taking NBFC that lends to small businesses, and its ratings rest mainly on expected support from its majority owner, Fullerton, rather than on its own results. An AA- or A+ rating does not guarantee repayment or remove investment risk. (Note: ratings are from reports dated November 2025 to March 2026, results run to the June 2026 quarter, and bond status is as of November 2, 2026.)

• Issuer: Lendingkart Finance Limited (LFL), a non-deposit-taking NBFC that gives unsecured business loans to small businesses. It is a 100% subsidiary of Lendingkart Technologies Private Limited (LTPL), which Fullerton Financial Holdings (a Temasek unit) controls with about 77%.

• Ratings: [ICRA]AA- (Stable), Crisil AA-/Stable and IND A+/Stable (India Ratings). All three were upgrades or new ratings between November 2025 and March 2026.

• Why they are high: the ratings rest mainly on expected support from Fullerton, not on the company's own results. The company is making large losses.

• FY2026 result: net loss of ₹333 crore on revenue from operations of ₹327 crore, after a net loss of ₹288 crore in FY2025.

• Latest quarter (April–June 2026): loss narrowed to ₹32 crore.

• What is outstanding: the rated NCDs we could identify in the rating reports have matured, except one that matures on December 31, 2026. We could not confirm any new series. Check before assuming a bond is available.

• Dispute: the founders are in a legal fight with Fullerton at NCLT Ahmedabad. On October 12, 2026, the tribunal refused their request for mediation, so the main case continues.

• Key risks: heavy losses, unsecured small-business loans, reliance on a parent's support that is not a legal guarantee, loan covenant breaches, and a business model that is still being rebuilt.

What Is Lendingkart Finance Limited?

LFL is registered with the RBI as a non-deposit-taking NBFC (formerly named Aadri Infin Limited). It is part of the Lendingkart Group, founded in 2014. It lends to micro and small businesses for working capital and business needs, and it uses technology and data to assess borrowers.

• Loan type: almost entirely unsecured business loans. Crisil reported an average ticket of ₹6–7 lakh, up to ₹35 lakh, with tenors up to 36 months.

• Borrowers: small traders, shop owners and suppliers to e-commerce firms, a segment that is sensitive to swings in cash flow.

• Ownership: LTPL holds 100% of LFL. Fullerton Financial Holdings, through Fullerton Financial Private Limited (FFPL), held about 77% of LTPL as of November 30, 2025, up from 38.16% in March 2024 and 55.57% in March 2025. Fullerton Financial Holdings is a step-down subsidiary of Temasek Holdings of Singapore.

• Management: Prashant Prakash Joshi is managing director and CEO, according to the company's results filing with BSE dated August 12, 2026.

A bond's rating and coupon only matter if the bond is actually outstanding. The rating reports list the following NCDs. As of November 2, 2026, based on scheduled maturity dates, only one of them is still outstanding.

What the table shows:

• Platform listings can show different coupons: Use the coupon in the rating agency's annexure as a starting point and confirm it in the information memorandum.

• Rated capacity is not issued debt: ICRA lists ₹121.6 crore of NCD capacity and ₹3.5 crore of market-linked debentures as "not yet placed", and Crisil's ₹200 crore NCD rating is marked "yet to be issued". These are limits, not bonds you can buy.

• No new series confirmed: We could not confirm any new NCD series after March 2026, and the company's Regulation 52(7) statement to BSE confirms that it issued no NCDs in the April–June 2026 quarter. Bond platforms may still show old pages.

• Maturity is not the same as repaid: ICRA withdrew its rating on several earlier NCDs after confirming that nothing was outstanding. For the maturities after that, check the exchange filings.

Because the only identified outstanding NCD matures on December 31, 2026, anyone buying now would be taking a very short holding period. Treat any new offer as a fresh decision that needs its own documents.

NCD Structure: How Lendingkart Finance Debentures Work

An NCD is a loan from you to a company, issued as a debenture. You get interest at the coupon rate and your principal at maturity. It cannot be converted into shares.

• Coupon and payout: the issue terms set the rate and whether interest is monthly, quarterly or cumulative. Check the payout frequency for the specific series in its information memorandum.

• Maturity and repayment: bullet (all at maturity) or amortising (in instalments). Check the schedule.

• Security: secured NCDs are backed by identified assets, and unsecured ones rely on the issuer's general ability to pay. LFL's June 2026 results state that its secured NCDs are backed by an exclusive charge on loan receivables, cash collateral and/or a pari passu charge on other financial assets, to at least 100% or as set out in each term sheet. The statutory auditor certified security cover of 1.10 times at June 30, 2026, with Catalyst Trusteeship as debenture trustee. Confirm the security for each series in its information memorandum and trust deed.

• Listing: listed NCDs are under SEBI's investor protection tools. Unlisted ones are not, and the rating agencies point this out in their disclosures.

• Coupon vs yield: the coupon is the stated rate on face value. Yield depends on the price you pay. Platform "indicative yields" can be computed at face value and are not guaranteed returns.

• Market-linked debentures (MLDs): LFL has also issued principal-protected MLDs, whose returns depend on a market index. They are more complex, and ratings cover only the credit risk, not the variability of returns.

AA- vs A+: why the agencies differ

On India's rating scale, AA means a high degree of safety and A an adequate degree of safety. ICRA and Crisil sit one notch above India Ratings. ICRA and Crisil both cite the same core reason: Fullerton's majority ownership and its stated intent to support the business. The agencies differ in how much weight they give to the heavy losses and the weak asset quality. The one-notch gap between AA- and A+ shows that agencies can weigh the same facts differently.

What the ratings depend on

• Parent support, not standalone strength: ICRA says the rating upgrade reflects strategic, operational and financial support from Fullerton, which has identified Lendingkart as its primary lending platform in India. Crisil says the same and also notes a plan to bring the Fullerton brand into the group as a tagline.

• Capital infusions: Fullerton put in ₹252 crore in FY2025 and ₹510 crore in November 2025. ICRA says the group has received about ₹1,484 crore from Fullerton since FY2019.

• Board control: Fullerton has three nominee directors and has helped strengthen risk and asset-liability committees.

Rating sensitivities

Could weaken the rating (ICRA and Crisil):

• Fullerton's shareholding falling below 51%, or a material change in its support stance

• A significant weakening of Fullerton's own credit profile

• Gearing above 4 times

• Sustained pressure on profit or asset quality

Could support an upgrade growing the new loan book while keeping asset quality healthy and, per Crisil, return on managed assets above 3% on a steady basis.

A rating is an opinion. It is not a guarantee, and agencies can revise or withdraw it. As of this writing we found no later rating action on the NCDs than the three above. Crisil's annual review is due around November 2026.

The Business Rebuild

The lender is changing how it lends. The reports describe these shifts:

• Larger tickets: loans below ₹10 lakh were about 56% of AUM at September 2025. The company aims to lower that share and grow loans above ₹20 lakh, which have performed better.

• "Phygital" underwriting: new sales offices, dedicated underwriters and tiered manual checks by ticket size, instead of a mostly automated process.

• New product: micro loans against property are planned, although unsecured loans will stay the main business.

• Co-lending ended: Crisil says the company chose to stop co-lending and to rely more on its own balance sheet. The off-book portfolio will keep shrinking over two to three years.

• Smaller footprint: the company is cutting some geographies and stressed segments, and AUM has fallen sharply.

ICRA's verdict is that none of this has been proven yet. The company still has to show it can grow the new loan book profitably while controlling credit costs.

What the numbers say

Revenue has collapsed, down about 62% in FY2026, because the company slowed lending sharply while it rebuilt. Total expenses were ₹773 crore, including impairment (provisions) of ₹290 crore. That still left a larger loss than the year before.

• The latest quarter is better. The April–June 2026 loss of ₹32 crore was down 73% from the March quarter, and revenue rose about 15% in the quarter. One quarter is not a trend.

• Size has shrunk a lot. Crisil reports AUM of ₹7,254 crore in March 2024, ₹5,000 crore in March 2025 and ₹4,141 crore in June 2025. We could not find a reliable March 2026 AUM figure.

• Capital looks comfortable on paper. The June 2026 filing shows a CRAR of 75.09%, a net worth of about ₹717 crore and a debt-to-equity ratio of 0.99 times, helped by fresh equity and a smaller loan book. The regulatory minimum CRAR is 15%. But continued losses would eat into this cushion.

Asset Quality: The Number Behind the Number

Reported bad loans look moderate. The full picture is much harsher.

The company's June 2026 filing reports a gross NPA of 3.00% and a net NPA of 1.26%, after the benefit of government guarantee schemes. These reported ratios do not add back write-offs.

The company wrote off a large amount of loans: Crisil reported ₹442 crore in FY2025, of which ₹154 crore was on its own book. Write-offs keep reported bad-loan ratios low, so lenders and investors look at figures that add them back. Credit costs were 4.2% of AUM in FY2024 (ICRA), 8.5% in FY2025 and about 6.8% annualised in H1 FY2026.

There is one partial cushion. About 56% of total AUM, and 60% of the own book, was covered by government credit guarantee schemes (CGTMSE and CGFMU) in September 2025. The company received ₹56 crore from these schemes in FY2024 and ₹67 crore in FY2025, and ₹183 crore in total to date. This helps recoveries but does not remove losses.

Liquidity, Funding and Covenants

• Cash and obligations: ICRA reports repayment obligations of ₹596 crore over the six months to March 2026, against ₹201 crore of cash and ₹81 crore of undrawn lines at September 30, 2025, plus the ₹518 crore of equity raised in November 2025. Crisil reports ₹167 crore of cash and ₹64 crore of undrawn lines at that date, covering about 1.3 times the next two months' obligations. Both call liquidity adequate or strong.

• Asset-liability gaps: no negative cumulative gaps in the under-one-year buckets.

• Covenant breaches: ICRA notes that the company breached some financial covenants with its lenders and received temporary relaxation from a few of them. Many loan agreements let lenders raise rates or demand early repayment if covenants are breached and waivers are not given. This is an important risk that the headline ratings do not make obvious.

• Funding diversification: Crisil expects the group's borrowing profile and costs to benefit from its association with Fullerton.

The Dispute With the Founders

In November 2025, founder Harshvardhan Lunia, with Raichand Lunia and Anand Lunia, filed a petition at NCLT Ahmedabad against LTPL and Fullerton Financial (CP 72(AHM)/2025; LFL and the RBI are also named as respondents). They allege oppression and mismanagement by the majority shareholder and its nominee directors. LTPL and Fullerton oppose the petition, and LFL's June 2026 results note that it has filed its reply.

What has happened since:

• LTPL still raised its ₹518 crore of equity on November 30, 2025, and ICRA said it would keep watching the matter.

• On June 18, 2026, the petitioners said they were willing to settle. Their proposals were rejected on July 7 (by LTPL) and August 7, 2026 (by Fullerton).

• On October 12, 2026, the tribunal dismissed the petitioners' application to refer the dispute to mediation. The main petition proceeds.

Why it matters to bondholders: the case concerns control of the parent. A change in Fullerton's role would hit the main reason for the ratings. So far there is no ruling on the merits, and this article does not take a side.

What Supports the Credit

• A well-resourced majority owner that has put in large amounts of capital and says it wants to stay in control

• Experienced new management and tighter risk controls

• Strong capital adequacy on a standalone basis

• Government credit-guarantee cover on more than half of the book

• A smaller portfolio, with a narrower loss in the latest quarter

Key Risks of Investing in Lendingkart Finance NCDs Drag

1. Parent support is not a guarantee: The ratings assume support from Fullerton. The agencies call it expected, not contractual. Unless an offer document says otherwise, neither Fullerton nor Temasek guarantees the NCDs.

2. Continued losses: Losses have continued for more than two years. ICRA expected further losses in FY2026 and the first half of FY2027. Equity can fund the losses only for so long.

3. Asset quality: The loans are unsecured and the borrowers are small businesses, so write-offs can stay high even if reported Stage 3 looks moderate.

4. Execution risk in the rebuild: Larger tickets, new offices and a new secured product carry their own risks, and the results are not yet proven.

5. Covenant and refinancing risk: Breached covenants, even if waived, make funding less certain. If lenders or investors pull back, repayments could come under stress.

6. Legal and governance risk: The founders' case against Fullerton could affect control and could distract management. A court outcome could change the ownership picture.

7. Shrinking scale: A smaller loan book means less income to cover costs, which makes returning to profit harder.

8. Rating risk: A fall in Fullerton's stake below 51%, or a withdrawal of support, could lead to downgrades. Rating agencies can also withdraw ratings.

9. Liquidity and exit risk: Listed NCDs from small issuers trade thinly. You may have to hold to maturity or sell at a discount.

10. Data and disclosure risk: Platform pages can show stale data, such as matured bonds, or conflicting coupons. Use the offer document and exchange filings.

11. Market and reinvestment risk: Prices fall if interest rates rise, and you may reinvest at lower rates when the bond matures.

Comparative View: NCDs vs Bonds

Both are debt securities. "Bond" is the wider term, and an NCD is a company debenture that cannot be converted to equity. What matters for safety is the issuer, the rating, the security and the terms, not the label.

Taxation Framework on Indian Corporate NCDs

Under the Income-tax Act, 2025 (in force from April 1, 2026), interest is generally taxed at your slab rate, and TDS under Section 393(1) is generally 10% for residents who have furnished PAN where interest exceeds ₹10,000 in a year. A listed NCD sold after 12 months can give a long-term gain taxed at 12.5%, and a sale within 12 months is taxed at slab rates. Rules change, so confirm with a tax adviser.

Investor Evaluation Checklist Before Allocation

1.Confirm the ISIN is outstanding. Most of the identified Lendingkart NCDs have already matured.

2. Check the exact rating and date for that ISIN, and whether any agency has acted since March 2026.

3. Read the offer document and trust deed. Look for security, covenants, events of default and any call or put options.

4. Verify the coupon and payout dates against the information memorandum.

5. Compare the yield after tax with safer options, and check how long you would hold.

6. Review the latest results for losses, write-offs, capital and liquidity, and any lender covenant news.

7. Follow the NCLT case and any change in Fullerton's shareholding. A fall below 51% is a rating trigger.

8. Check listing and trading volume. An unlisted NCD is not covered by SEBI's complaint tools.

9. Limit your exposure. Keep any single issuer to a small share of your portfolio.

10. Do not assume parent support is a guarantee.

How to Evaluate Whether a Lendingkart NCD Suits You

The NCDs may suit only an investor who understands credit risk, accepts that the company is loss-making, can hold to maturity and keeps the position small. They are unlikely to suit someone who wants capital safety or needs a quick exit. The rating gives comfort about parent support, but it does not remove the risks above. If you are unsure, consult a SEBI-registered investment adviser.

Conclusion

Lendingkart Finance has AA- and A+ ratings and a large parent, but loss-making finances. Three agencies rate its debt AA- or A+ because Fullerton owns about 77% of the group, has put in large amounts of capital, and says it will stay. Meanwhile, revenue has fallen more than 60%, losses have continued, reported bad loans hide heavy write-offs, some lender covenants have been breached, and the founders are fighting the owner in court.

For an NCD investor, the question is whether Fullerton's support is enough. The rating agencies have assumed it will be, for now, but they also say it is not a guarantee. Check the exact ISIN, the latest rating and results, and the legal documents, and keep any position small.

Published By:

BondScanner, a SEBI-registered Online Bond Platform Provider (OBPP). Links to BondScanner's platform and app listings are for educational and informational discovery purposes only.

Disclaimer:

This blog is intended solely for educational and informational purposes. The instruments, issuer categories, yield ranges, and examples mentioned herein are illustrative and should not be construed as investment advice or recommendations. BondScanner is a SEBI-registered OBPP and does not provide personalised investment advice. Nothing in this article is a solicitation to buy or sell any security. Fixed and coupon returns described in this article do not constitute guaranteed or assured returns. Investments in debt securities are subject to market, credit, and default risks, including delay and/or default in payment. Investors must read all offer-related documents carefully before investing.

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