India Ratings and Research (Ind-Ra) has downgraded Jana Holdings’ non-convertible debentures (NCDs) to ‘IND D’ from ‘IND BB’/Stable after the company and its parent, Jana Capital, extended the maturity of their debt obligations originally due on June 30.

In a press release dated June 30, Ind-Ra said it treated the extension of the NCD maturity to December 31 as a “Distressed Debt Exchange” under its default recognition criteria, effectively categorising the move as a default.

The rating action applies to NCDs worth ₹3,625 million issued by Jana Holdings. The agency said both Jana Holdings and Jana Capital had informed debenture holders that repayments due on June 30 would be deferred under revised terms approved by lenders and boards of the companies.

The development follows a CNBC-TV18 report on June 30 that Jana Holdings was likely to default on its obligations.

According to Ind-Ra, Jana Holdings and Jana Capital together had around ₹42 billion in repayments, including accrued interest, falling due on June 30, 2026. The agency said the companies were unable to refinance the obligations or monetise their stake in Jana Small Finance Bank (JSFB) before the due date.

“Following the approval on tenor extension, the entities will not make payments on 30 June 2026, which has been construed as default,” the rating agency said.

Ind-Ra noted that both entities are non-operating holding companies with no independent cash flows. Debt servicing was expected to be funded through stake sales in JSFB or refinancing transactions.

In April 2026, Jana Holdings sold a 4.9% stake in JSFB to the TVS Group for ₹1.93 billion. The proceeds were intended to partly service upcoming debt obligations, according to the agency. However, the amount was insufficient relative to total repayments due.

The rating agency also flagged weak liquidity and elevated refinancing risk. It estimated the value of Jana Holdings’ stake at about ₹8.34 billion, significantly lower than the debt obligations due for repayment.

Ind-Ra said it does not expect dividend inflows from Jana Small Finance Bank in the medium term. It also noted that debt at the holding company level is largely structured as zero-coupon bonds, resulting in lump-sum repayments at maturity.

The agency said Jana Holdings and Jana Capital are in the process of merging and that filings related to the merger have already been made with the Registrar of Companies.

Jana Holdings is the promoter entity of Jana Small Finance Bank and currently holds a 16.94% stake in the lender.