Kanakadurga Finance Bonds

Headquartered in Vijayawada, Andhra Pradesh, Kanakadurga Finance Limited (KFL) is an RBI-registered NBFC. KFL has issued secured, listed, and redeemable Non-Convertible Debentures (NCDs) offering 12.5%-13% p.a. returns (YTM). The minimum investment is Rs 10,000, with the coupon rate (fixed) of 11.00% to 11.60% per annum, payable monthly. The credit rating of Kanakadurga Bonds is BBB (Outlook: Stable) by CARE Ratings Limited. 

Investors can purchase Kanakadurga Bonds through the Paisabazaar app by following the steps below:

Step 1: Download the Paisabazaar App and log in through your mobile number.

Step 2: Under the ‘Investment Products’ section, click on the ‘Bond-SEBI Regulated’ tab 

Step 3: Complete KYC Verification by verifying your email address. 

Step 4: Fill in personal information, bank details, and lastly e-sign.

Step 5: Link demat account

Step 6: Buy Kanakadurga Bonds and earn returns of 12.5% to 13% p.a.

• Investors can earn higher returns (YTM) of 12.5%-13% p.a. by buying Kanakadurga Bonds through the Paisabazaar app.
• These bonds are senior secured NCDs with 1.10x security cover and maintain a 100% secured loan portfolio, providing strong collateral backing.
• The bond interest payment frequency is ‘monthly’. This offers investors a steady stream of consistent income.
• Investors can sell the bond in the market as it is listed on the Bombay Stock Exchange (BSE).
• The bond falls under an investment-grade credit rating (BBB by CARE). This indicates a moderate degree of safety regarding timely payments of financial obligations and moderate credit risk.

Kanakadurga Finance Bonds have been assigned a credit rating of BBB (Outlook: Stable) by CARE Ratings Limited (CareEdge Ratings). 

Credit Strengths

According to the CARE report, the NBFC’s AUM increased by 9% in financial year 2025 from Rs 602 crore as on 31 March 2024, to Rs 656 crore as on 31 March 2025. The AUM further increased to Rs 708 crore as on 30 September 2025. It is mainly supported by growth in the CV segment and gold loan segment. The disbursements also increased to Rs 878 crore in FY25 from Rs 818 crore in FY24. 

Credit Challenges

The credit cost of the company continued to remain high at 1.77% in FY25 against 1.20% in FY24. Due to this, return on total assets (ROTA) decreased to 1.06% in FY25 compared to 1.14% in FY24, despite an increase in NIM and lower opex. CARE mentions that the NBFC has 

moderate asset quality, relatively riskier customer segment, moderate resource profile and geographically concentrated AUM with inclination to South India. The portfolio remains concentrated with 78.1% of the AUM in South India. 

• Kanakadurga Finance Limited is an RBI-registered NBFC wherein the promoters are highly supported by a team of qualified and experienced management. It is promoted by Sandireddy Lakshmi Narayana, who has over 3 decades of experience in the vehicle finance industry. 
• The NBFC receives support from BanyanTree Growth Capital II, LLC, a private equity fund, which invested in March 2017 and holds a 28.83% stake as of September 30, 2025.
• These bonds are senior secured NCDs, i.e., bondholders have a legal claim on the company’s underlying assets.
• The company has partnerships with 45 lenders, including HDFC, Union Bank of India, Muthoot, and Northern Arc, enabling co-lending opportunities.

Investors can redeem Kanakadurga Finance Bonds by contacting their broker or selling through the stock exchange (BSE).

Kanakadurga Finance Limited is an RBI-registered NBFC as an asset financing company and is primarily engaged in vehicle financing and gold loans. The company has a presence in Karnataka, Tamil Nadu, Andhra Pradesh, Telangana, Gujarat, Pondicherry and Madhya Pradesh. Previously, the company was incorporated as a private limited company in 1994 and was converted to a public limited company (closely held) in 1996.

Key Financial Indicators

All ratios as per CARE calculations; Amount in Rs. crore

Brief Details of the Management of the Company

The company is promoted by Mr. Sandireddy Lakshmi Narayana and the company’s day-to-day operations are managed by his sons, Mr. Sandireddy Jayaprakash Narayana Chowdary (Chief Financial Officer) and  Mr. Sandireddy Sriman Narayana (Managing Director). 

Risk Factors

General Risks

• Credit Risk: Kanakdurga bond is rated BBB by CARE. The rating can be downgraded by the rating agency due to deterioration of the financial statements.
• Interest Rate Risk: The price of the Kanakdurga bond may fall due to a rise in the market rates.
• Liquidity Risk: The product is listed on the stock exchange but might not be actively traded. Bondholders may find it difficult to sell securities and have to hold until redemption to realise any value.

Specific Risks

• The portfolio of KFL is concentrated in South India, with 78.1% of the AUM as of September 2025. Andhra Pradesh alone contributes 48.5% of AUM, followed by Gujarat (21.1%), Karnataka (13.8%), Telangana (9.2%), Tamil Nadu (5.8%), Pondicherry (0.9%), and Madhya Pradesh (0.7%). 
• The borrowings from NBFCs remain the primary source of funding, accounting for 39.8% of total borrowings as on September 30, 2025. 
• CAR of 20.22% provide limited near-term headroom to take more debt and increase scale of operations.