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Time of India
4 days ago
- Business
- Time of India
Lendingkart Finance reports losses, breaches bond covenant for 2024-25
Mumbai: Singapore's Temasek-backed digital lender Lendingkart Finance has reported losses before tax for 2024-25, a development that has triggered a breach of covenant on bonds raised by the company in January 2024, said people with knowledge of the matter. Lendingkart Finance had raised ₹75 crore senior secured two-year bond at 11.25% on January 30, 2024. One of the covenants of the bond is that during the tenure of the bond, the company must post profits before taxes. Having breached this covenant, the fintech sought a waiver from the bondholders last week, said the people. The breach of covenant in this case implies that the bondholders can seek accelerated payments of all their dues or even terminate the credit facility, according to the bond document. Bonds Corner Powered By Lendingkart Finance reports losses, breaches bond covenant for 2024-25 Lendingkart Finance, backed by Temasek, faced losses before tax in 2024-25, breaching a covenant on its ₹75 crore bonds. The company is seeking a waiver from bondholders, who are likely to grant it given the guarantee from Lendingkart Technologies and Temasek's increased stake. Despite the losses and a shrinking loan book, investors are comforted by Temasek's commitment and past investments. India's index-linked bonds see record foreign selling in May on profit-booking, currency swings India bond yields resume decline as all eyes on RBI decision this week JPMorgan CEO Dimon backs US taxing carried interest, warns of bond market trouble Adani Ports taps its largest ever domestic bond - Rs 5,000 crore 15-year NCD Browse all Bonds News with However, the bondholders are likely to waive the covenant since there has been no default in coupon payment, said people in the know. Secondly, these bonds are also guaranteed by the holding company Lendingkart Technologies Pvt Ltd (LTIL), bond documents showed. Besides, investors have the comfort that Fullerton Financial Holding Pte, a wholly-owned subsidiary of Temasek Holdings, has increased its stake in LTIL to 44% from 37% for ₹77 crore. "We remain committed to meeting all our financial obligations in a timely manner," Lendingkart Finance said in response to ET's queries. The unlisted fintech, which specialises in giving unsecured loans to small and medium companies, reported losses before tax of ₹396 crore against a net profit of ₹80 crore a year ago. Live Events Higher provisions on stressed loans and lower revenue from lending resulted in Lendingkart Finance reporting a net loss of ₹288.3 crore for 2024-25, a sharp reversal from its ₹60 crore net profit in the previous financial year. Its loan book shrank 35% to ₹1,382.3 crore while provisions on bad loans doubled to ₹523.5 crore from ₹256.3 crore during this period. Agencies Lendingkart Finance's tier 1 ratio declined to 22% in September 2024 from 34% in March 2024 after the Reserve Bank of India stated that the first loss default guarantee (FLDG) provided to the co-lending partners has to be deducted from tier 1 capital, according to a rating report by ICRA . The FLDG provided by the company stood at ₹172 crore at the end of September 24, the report said. The investors include Harshvardhan Lunia, a co-founder of Lendingkart Group, Fullerton, Saama Capital, Mayfield India, India Quotient, Bertelsmann India Investments, Sistema Asia Fund and Darrin Capital Management. In October 2024, Temasek issued a ₹150 crore standby letter which Lendingkart Finance can draw down to meet any financial commitments. The group has received investment of ₹799 crore from Fullerton since October 2019.
Economic Times
4 days ago
- Business
- Economic Times
Lendingkart Finance reports losses, breaches bond covenant for 2024-25
Live Events Agencies (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Mumbai: Singapore's Temasek-backed digital lender Lendingkart Finance has reported losses before tax for 2024-25, a development that has triggered a breach of covenant on bonds raised by the company in January 2024, said people with knowledge of the Finance had raised ₹75 crore senior secured two-year bond at 11.25% on January 30, 2024. One of the covenants of the bond is that during the tenure of the bond, the company must post profits before breached this covenant, the fintech sought a waiver from the bondholders last week, said the people. The breach of covenant in this case implies that the bondholders can seek accelerated payments of all their dues or even terminate the credit facility, according to the bond the bondholders are likely to waive the covenant since there has been no default in coupon payment, said people in the know. Secondly, these bonds are also guaranteed by the holding company Lendingkart Technologies Pvt Ltd (LTIL), bond documents investors have the comfort that Fullerton Financial Holding Pte, a wholly-owned subsidiary of Temasek Holdings, has increased its stake in LTIL to 44% from 37% for ₹77 crore. "We remain committed to meeting all our financial obligations in a timely manner," Lendingkart Finance said in response to ET's queries. The unlisted fintech, which specialises in giving unsecured loans to small and medium companies, reported losses before tax of ₹396 crore against a net profit of ₹80 crore a year provisions on stressed loans and lower revenue from lending resulted in Lendingkart Finance reporting a net loss of ₹288.3 crore for 2024-25, a sharp reversal from its ₹60 crore net profit in the previous financial year. Its loan book shrank 35% to ₹1,382.3 crore while provisions on bad loans doubled to ₹523.5 crore from ₹256.3 crore during this Finance's tier 1 ratio declined to 22% in September 2024 from 34% in March 2024 after the Reserve Bank of India stated that the first loss default guarantee (FLDG) provided to the co-lending partners has to be deducted from tier 1 capital, according to a rating report by ICRA . The FLDG provided by the company stood at ₹172 crore at the end of September 24, the report said. The investors include Harshvardhan Lunia, a co-founder of Lendingkart Group, Fullerton, Saama Capital, Mayfield India, India Quotient, Bertelsmann India Investments, Sistema Asia Fund and Darrin Capital October 2024, Temasek issued a ₹150 crore standby letter which Lendingkart Finance can draw down to meet any financial commitments. The group has received investment of ₹799 crore from Fullerton since October 2019.
