The downgrade of Jana Capital by India Ratings & Research (Ind-Ra), following the extension of the maturity date of its non-convertible debentures (NCDs), is unlikely to have any bearing on Jana Small Finance Bank (SFB), as there is no cross-default linkage between the debt of the SFB and Jana Holdings or Jana Capital, sources said.
Jana Capital is a systemically important core investment company, which has a wholly owned subsidiary, Jana Holdings— a non-operating financial holding company — and holds a 16.95 per cent stake in Jana SFB.
Jana Holdings, which earlier had a 44 per cent stake, has been reducing its stake in the bank over the years. Jana Holdings plans to sell further stake in the bank, which will help it repay debenture holders such as TPG Asia, which has a stake in the company. Eventually, Jana Holdings is likely to bring its stake in the bank below 10 per cent, which would mean the company will no longer be classified as a promoter entity.
Jana Holdings has not contributed any capital to the bank since June 2022. The bank has raised ₹1,268 crore over the past four years. Moreover, Jana Holdings does not have any board member on the bank’s board, and vice versa.
Late Tuesday, Ind-Ra downgraded Jana Capital’s NCDs to ‘IND D’ (default).
“The rating downgrade reflects Jana Capital’s and Jana Holdings’ confirmation to Ind-Ra that the debenture holders have agreed to extend the maturity of the rated NCDs — originally due on June 30 — to December 31,” the rating agency said.
Jana Holdings and Jana Capital have repayments of around ₹4,200 crore in total due on June 30 (principal plus accrued interest). Sources said the NCDs have been rescheduled to give the companies more time to sell their stake in the bank.
Jana Holdings divested a 4.9 per cent stake in the SFB to TVS Venu Group in April for ₹193.3 crore, which was intended to be utilised towards part servicing of upcoming debt obligations.
Ind-Ra noted that both Jana Holdings and Jana Capital are non-operating entities, with no cash flows of their own, and were to make payments towards these NCDs either through a stake sale of their operating entity — Jana SFB — or through refinancing.
Jana SFB shares ended marginally lower by 0.19 per cent on the BSE, closing the day at ₹467.9 apiece.
