TPG-backed Jana Holdings bond rating downgraded after repayment extension

MUMBAI: India Ratings & Research downgraded bonds of TPG-backed Jana Holdings Ltd (JHL), the holding company of Jana Small Finance Bank, and a subsidiary to “default” status after the companies got a six-month extension to repay bondholders around 42 billion rupees ($443.44 million).

Here are the details:

The India Ratings report on Tuesday downgraded JHL and unit Jana Capital’s non-convertible debentures (NCDs) rating to “default” from “stable”, citing poor liquidity with high refinancing risk.

The agency has put the rating of the bank under “watch with negative implication”, potentially delaying its re-application for a universal bank licence.

The repayment was extended to December 31, 2026, from June 30, 2026, as per India Ratings’ report.

“Ind-Ra has considered this amendment as a modification of the original contractual terms of the NCDs and treated it as a Distressed Debt Exchange as per its Default Recognition Criteria,” said the rating agency in its report.

TPG Asia is one of the JHL bondholders.

The holding company was to make the repayment by selling its stake in Jana Small Finance Bank or through refinancing, but failed to do so.

Jana Small Finance Bank, in an exchange filing, said that the restructuring pertains solely to the debt obligations of its promoter and has no impact on the financials and operations of the bank.

In April, JHL divested a 4.9% stake in the bank to the TVS Group for 1.93 billion rupees.

Jana Holdings currently holds a nearly 17% stake in the bank. The company reduced its stake from about 44% over the years and has not infused any capital since 2022, the bank said.

The bank said that once JHL’s stake reduces below 9.99%, it proposes to seek reclassification from promoter to public category shareholder.

TPG and GIC’s Caladium Investments hold a 19% stake each in the holding company.