Hardika Shah, founder, Kina Capital | Photocredit: Rahul M Sindhe
The MSME creditor-lender Kinara Capital, based in Bengaluru, is confronted with an in-depth liquidity crisis after a group of his lenders has moved to suitable fixed deposits and recovery loans, so ICRA has its credit assessments downgrade. The newest downgrade is on the heels of similar actions by India Ratings and Care Ratings in June, which is a reflection of increasing concern about the financial health of the company.
In her rating memorandum, ICRA mentioned serious decline in the liquidity position of Kinara Capital, according to the loan against its bank balance and the appropriation of pig-marked deposits by some of the lenders. The agency also marked that such actions could cause a chain reaction, so that possibly early repayment clauses from other lenders and exercised the liquidity of the company in the short term in the short term.
The company would weigh various options, including the sale of assets and corresponding liability transfers, because it tries to stabilize its position.
Kinara Capital, founded in 2011 by Hardika Shah, offers uncovered business loans to micro, small and medium-sized companies (MSMEs), mainly through its digital credit platform, Mykinara. Over the years, the fintech lender claims to have paid more than £ 4,000 crore to more than 50,000 borrowers, and the physical presence is due to 130 branches.
However, the financial statistics of the company have been greatly weakened in the past year. For FY25, it placed a stand -alone net loss of £ 351 crore, a sharp reversal of a crore gain of £ 62 in the previous tax. The total income also fell by 18 percent on an annual basis to £ 601 crore, while assets under management (AUM) fell 9.6 percent to £ 2,841 crore from March 2025, of £ 3,142 crore the year before. The contraction in AUM was partially attributed to the company that accepted a more cautious lending in the midst of rising delinquencies.
From June, Kinara Capital had an outstanding debt of £ 1,853 crore of 46 lenders, according to ICRA. So far, the company has collected around $ 178 million in financing from backers such as Impact Investment Exchange (IIX), Blueorchard, British International Investment, Nuveen and Triple Jump’s AMP Fund.
Published on August 2, 2025
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