In 2016 you could have put ₹1 lakh into AAA rated bonds of one of India's biggest home loan companies. 3 years later it stopped paying. This chapter follows that money, step by step, to the day it came back: the price on your screen, the letters, the vote, the court and the payout. Then it opens a case file of 21 real Indian bond failures, one by one.
Written 19th Oct 2026 · Figures from SEBI, RBI, IBBI, court orders, company filings and fund house disclosures, dated where used
1A safe bond, 2016
In August 2016, DHFL, one of India's biggest home loan companies, sold ₹10,000 crore of bonds to the public. They were rated AAA, the highest grade there is. They paid retail investors 9.10% to 9.25% a year, well above a bank deposit. Each bond cost ₹1,000.
Say you bought 100 of them: ₹1 lakh. Nothing about it looked risky. A big, well known company, the top rating, a listed bond you could see in your demat account. For 2 years, the interest arrived on time.
This chapter follows those ₹1 lakh from that day to the day the money came back, 5 years later. Along the way it explains, at the moment each one matters, everything that happens when a bond stops paying: the price on your screen, the letters you get, the vote you are asked to cast, the court, the payout, and why 2 people holding the same bond can get very different amounts back.
Case filesDHFL is one story. At the end of this chapter is a case file of 21 real Indian failures: IL&FS, SREI, Reliance Capital, Yes Bank's AT1 bonds, Sahara and more. Each opens to the same facts: who held the bonds, the warning signs, the prices, what the assets fetched, what holders got and how long it took. Read the story first; the case files will make far more sense after it.
A AAA rating, a big name and a listed bond still left room for things to go wrong. This chapter follows one such bond from purchase to payout, then opens 21 more cases at the end.
2The first crack, 2018
On 21st Sep 2018, a mutual fund sold a large block of DHFL's bonds at a high yield. Nobody outside knew why. Traders read it as a sign that someone was worried, and panic followed. DHFL's share price fell 43% in one day. Your ₹1,000 bond, which had traded at ₹999 the day before, traded at ₹894.
Nothing had been missed. The rating was still AAA. Within weeks the bond price had mostly recovered, and most holders forgot about it.
A bond's price is the market's running guess about whether you will be repaid. When that guess changes suddenly, the price falls first and the explanation comes later. It is like a shop that suddenly offers 10% off a fridge: maybe it is a festival sale, maybe the shop is closing down. You do not know yet, but it is worth asking.
A sudden fall in a bond's price is the market asking a question about the company. It is not proof of trouble, but it is worth an answer.
3Still AAA, January 2019
On 29th Jan 2019, a news website accused DHFL's owners of moving thousands of crores out of the company. That week, the same bond fell from ₹913 to ₹641. Its rating was still AAA. A reader on TradingQnA saw the discount and asked:
What if company (in this case DHFL) goes bankrupt, still company is liable to pay interest? Ie if I buy these bonds from second market (zerodha) at discount will I get interest and full amount on maturity date?
It is the right question, and the rest of this chapter answers it. The first part of the answer arrived 2 days later: CARE cut DHFL from AAA to AA+ in a letter dated 1st Feb 2019. The price had already fallen by a third. The rating followed the price, not the other way round (chapter 10 explains why ratings tend to move late).
The bond lost a third of its price while it was still rated AAA. Watch the price of what you own, not only its rating.
4The missed payment, June 2019
On 4th Jun 2019, DHFL did not pay ₹961.95 crore of interest due to about 36,700 retail bondholders. Your interest did not arrive that day.
That first miss was not yet a default. Most bonds give the company a short grace period, and DHFL paid within its 7 working days. But the rating agencies cut it to D, for default, the very next day. In July 2019 DHFL began missing payments it could not make up. In November, RBI removed its board.
Bonds can go wrong in 4 ways, and it helps to know which one you are in:
A late payment, made up within the grace period, like DHFL's in June.
A default: a coupon or repayment is missed and not made up. This is where DHFL ended up.
A write off: a bank's AT1 or Tier 2 bond is cancelled by order, with no missed payment first (chapter 12, and the Yes Bank case file).
A loss without a default: the price crashes, or a fund holding the bond shuts its doors, while the company is still paying (the Franklin Templeton case file).
A missed payment made up within the grace period is not a default. One that is not made up is, and from then on a different set of rules takes over.
5The letters start arriving
Once a bond defaults, you do not chase the company yourself. Thousands of holders each writing their own letters would get nowhere. Instead, every listed bond has a debenture trustee, a SEBI registered firm that acts for all the holders together. Think of it as the secretary of a housing society: one office that speaks for every flat owner, but only does what the owners decide.
The rules have tightened since DHFL. Today, when a listed bond misses its final repayment, the timetable runs like this:
2 working days before the due date, the exchange stops trading the bond.
Within 1 working day after, the company must tell the exchanges, the depositories and the trustee whether it paid. If it stays silent, the trustee must find out and report within 9 working days.
Your demat statement then shows the bond tagged "ISIN defaulted in redemption".
Within 3 days of the default, the trustee sends every holder a notice, by post and by email.
You get 15 days to reply to what it asks, such as permission to sell the pledged assets or to sign an agreement with other lenders.
Within 30 days, the trustee holds a meeting of holders, unless the company has paid by then.
Plate 13.1
The first days after a missed repayment
What happens around T, the day a listed bond was due to repay, in working days
Source: SEBI circulars of 23rd Jun 2020 and 13th Oct 2020
The trustee also has tools. A trustee for listed secured bonds can take and sell the pledged assets without first going to court, and every company that lists bonds keeps a small fund with the exchange to pay the trustee's lawyers from day one.
But it acts on what the holders decide, and that makes your reply count. In 2024 a trustee took Coffee Day Enterprises to the insolvency court over a missed coupon. On 27th Feb 2025 the appeals tribunal threw the case out, because the trustee had not first got a majority of bondholders to approve it (the Coffee Day case file has the rest).
RememberKeep the email and address on your demat account current. The trustee's notice goes there, and the 15 days start whether you read it or not.
The debenture trustee acts for all holders, like a housing society's secretary. Watch for its notice, reply within 15 days, and vote.
6Can I sell? 2019 to 2021
After the default, many holders wanted out. They could still sell, but only in a deal agreed with a buyer and reported to the exchange, not on the normal order book. And there were few buyers. Mostly they were distressed debt funds, which buy many failed bonds cheap expecting some to recover well, and asset reconstruction companies, which buy bad loans and try to collect them. Mutual funds were often the sellers, because they had to cut their losses: on 6th Jul 2020 one fund house sold about ₹75 crore of DHFL bonds it had already marked at zero.
Here is what your ₹1,000 bond was worth along the way:
When
What happened
Price
20th Sep 2018
A normal day; rated AAA
₹999
21st Sep 2018
The first crack
₹894
1st Feb 2019
A week after the allegations; still AAA that morning
₹641
Jun 2019
Rated D; mutual funds marked it down 75%
About ₹250 in fund books
13th Feb 2020
The last traded price a fund house used
About ₹209
19th May 2020
Valued for funds by the rating agencies
About ₹100
Sep 2021
The rescue plan paid out
₹1,000 to a holder of up to ₹2 lakh
Plate 13.2
One DHFL bond, from AAA to payout
Price per ₹1,000 of face value on 7 dates, then what the rescue plan paid in Sep 2021
Source: NSE price files; Baroda MF valuation notes; DHFL resolution plan. Prices from Jun 2019 are fund valuations
Look at the 2 ends. Someone who sold in May 2020 got about ₹100 for a bond that, 16 months later, paid a small holder the full ₹1,000. Someone who bought it for ₹100 made 10 times their money. A defaulted bond's price is not a forecast. It is what the most worried seller will accept from the most patient buyer.
It can go wrong the other way too. Lakshmi Vilas Bank's Tier 2 bonds traded above their face value as late as September 2020, 2 months before RBI ordered them written off to zero (its case file).
After a default, a bond can still be sold, but only in reported deals to a few distressed buyers, at prices that say more about who is selling than about what will be paid.
7The company goes to court, 2019 to 2021
On 3rd Dec 2019, DHFL became the first finance company sent to India's insolvency court under the Insolvency and Bankruptcy Code (IBC). What happens there is a kind of auction:
The court takes the company out of its owners' hands and gives it to a resolution professional, a licensed manager who runs it in the meantime.
Everyone the company owes money to files a claim. The lenders form a committee of creditors. Bondholders sit on it as a group, and their trustee or representative votes as they instruct.
The committee invites bids for the whole company. In DHFL's case, Piramal and Oaktree, an American fund, bid against each other.
The committee votes. In January 2021 it chose Piramal.
The court checks the plan and approves it. For DHFL, that came on 7th Jun 2021.
The insolvency court is not the only road. Lenders can also agree a plan among themselves, under RBI's rules for a lenders' agreement, without a court: Reliance Home Finance and Altico Capital were settled that way. And if no acceptable bid comes, the company is liquidated, sold off piece by piece, which usually pays least. Cox & Kings went that way. By June 2026, 42% of all insolvency cases that had closed ended in liquidation (Cox & Kings case file).
In the insolvency court, the lenders auction the company and vote on the best bid. Bondholders vote as a group through the trustee. If no bid comes, the company is sold in pieces.
8What was left to sell
Your DHFL bond was secured. Its offer document promised security "adequate to ensure 100% asset cover": for every rupee of bonds, at least a rupee of DHFL's assets was set aside for bondholders. So why was there not enough to go round?
Because the assets were DHFL's own loans to other people. Think of a pawn shop that lends against gold. If the gold is real, the loan is safe. If the gold turns out to be brass, the paper still says 100% covered, but the cover is worth what the brass will fetch. When a lending company fails, many of its loans turn out to be worth far less than they said on paper.
Company
Owed to creditors
Sold for
Buyer
DHFL
₹87,248 crore
₹34,250 crore, of which ₹19,550 crore in new 10 year bonds
Piramal
SREI
₹32,749 crore
₹14,868 crore, of which ₹3,180 crore in cash
NARCL, the government backed bad bank
Reliance Capital
₹26,087 crore
₹9,661 crore, all cash
IIHL, of the Hinduja group
Sintex Industries
₹7,802 crore
₹3,651 crore
Reliance Industries and ACRE
Cox & Kings
₹8,906 crore
Liquidation; every asset together reserved at ₹35.88 crore
Sold in pieces
Plate 13.3
What was owed, and what it sold for
Claims against 5 failed companies and what their rescue or sale brought in, ₹ crore
Source: NCLT orders, company filings, IBBI newsletter Apr to Jun 2026
Across every rescue plan approved up to June 2026, creditors got back 30.52% of what they were owed, but 94.72% of what the companies were actually worth. Both are true at once. The buyers paid a fair price for what was left; there was simply far less left than had been lent.
Notice too how DHFL's ₹34,250 crore was paid: more than half in new 10 year bonds, not cash. SREI's plan was mostly IOUs that pay only if the buyer later collects. A headline recovery figure is not the same as money in your account.
"100% asset cover" is a promise on paper. When a lender fails, the loans behind that promise sell for far less, and part of what comes back is new paper, not cash.
9Payday, September 2021
In the last week of September 2021, DHFL holders opened their demat accounts to something strange: their bonds had been replaced by new entries with a face value of ₹820 and a maturity of 2041. It looked like a disaster. It was only the plumbing, the way the payout was moved through the depositories, and the cash followed within days. Holders had been working out their share for months:
I hold an secured NCD of DHFL of rs1000. So under new resolution i will receive 100% of the principal back as I hold less than rs 2 lakh.
They were right. Your ₹1 lakh came back in full, 2 years and 3 months after the first missed payment, though without the interest for the years in between. Others who had lent to the same company got very different amounts:
DHFL holding
What the plan paid
Bonds up to ₹2 lakh
100% of principal, in cash
Bonds of ₹2 lakh to ₹10 lakh
43.82% of the claim, in cash
Bonds above ₹10 lakh
43.29%: 19.67% in cash and 23.62% in new Piramal bonds
Fixed deposits, any size
23.08%
The last row is the hardest. DHFL's depositors had lent to the same company, but as a group they ranked and voted differently, and even a small depositor got less than a quarter:
I am FD holder having investment less than 2 lacs but got credit of only 23% of admitted claim.
Across all the cases, the same 3 things decided what people got far more than the coupon did:
Secured or unsecured. At Reliance Capital, secured lenders other than small ones got 42.73%; unsecured lenders got 5%.
How you voted. Under the IBC, anyone who votes against the winning plan, or does not vote, gets only what a liquidation would have paid. At SREI, unsecured bondholders who voted yes were allotted about 4.4%; those who did not got nothing (SREI case file).
How much you held. Rescue plans often protect small holders, as DHFL's did. At Reliance Capital, individual secured bondholders with up to ₹10 lakh who voted yes got all their principal back (Reliance Capital case file).
Your ₹1 lakh came back in full because it was secured, it was small, and the plan protected small holders. Secured or unsecured, how you vote and how much you hold decide what you get.
10How long it takes
The law has a clock. Under the IBC, a rescue should be done in 180 days, with one extension of 90 days, and an outer limit of 330 days. Real cases run much slower. Cases that ended in a rescue plan up to June 2026 took 633 days on average, and the plans approved between April and June 2026 took 1,026 days. DHFL, at 2 years 3 months from first missed payment to cash, was one of the quicker ones:
Case
From first trouble to money
DHFL
Jun 2019 to Sep 2021: about 2 years 3 months
Altico Capital
Sep 2019 to Mar 2022: about 2 years 6 months
SREI
Oct 2021 to the first cash in Oct 2023: about 2 years, with paper still to pay
Reliance Capital
Nov 2021 to Mar 2025: about 3 years 4 months
Coffee Day Enterprises
Sep 2019 to Jul 2025: about 5 years 9 months
IL&FS group
Sep 2018 to now: 8 years and counting
Plate 13.4
The law's clock and the real one
How long a rescue should take under the IBC, and how long it took, in months
Source: IBC section 12, IBBI newsletter Apr to Jun 2026, case filings
The law says 330 days. In practice, plan for 2 to 3 years, and longer if the case reaches the Supreme Court.
11Looking back: the signs that came first
Looking back at DHFL, the warnings were all public: a sudden price fall in September 2018, a much bigger one in January 2019 while the rating stood still, then a rating cut. The case files at the end show the same signs again and again:
The price fell before the rating. DHFL, and Reliance Home Finance, whose bonds traded at yields near 50% by the end of April 2019.
A group company was already in trouble. CARE cut IL&FS's roads arm to junk on 18th Jul 2018 while the parent was still AAA (IL&FS case file).
The auditor walked out. PwC resigned as auditor of Reliance Capital and Reliance Home Finance on 11th Jun 2019, saying its questions had not been answered.
One small downgrade tripped a big wire. A one notch cut on 3rd Sep 2019 let Altico Capital's lenders demand more than ₹1,000 crore back early; it defaulted 9 days later (Altico case file).
The owners had pledged their shares. Sintex's promoters had pledged about 84% of theirs; mutual fund loans to Essel group companies were backed by pledged shares worth only 1.5 times the loan (Essel case file).
A single sign is not proof; prices fall and auditors change for ordinary reasons too. But when the price, the rating and the news all point the same way, it is time to ask whether you still want to lend to that company.
Falling prices, a troubled group company, an auditor leaving, a rating trigger, pledged shares: each case flashed several of these first. When they flash together, ask whether to stay.
12If it happens to you
Before:
Spread out. Hold several smaller amounts across companies rather than one big one. Recovery plans often favour small holdings.
Prefer secured bonds, and know where you stand in the queue (chapter 10).
Watch the price, not only the rating.
Keep your demat email and address current.
After a missed payment:
Check your demat statement for the defaulted tag, and the company's NSE or BSE filings.
Read the trustee's notice and reply within 15 days. Vote; not voting can cost you everything.
Do not panic sell to the first distressed buyer before you know your class and slab. Do not assume waiting is always right either: it can take years.
To complain, use SEBI's SCORES portal (the company must reply within 21 days) or its SMART ODR portal. SCORES will not take complaints against a company already in insolvency; those go to the insolvency regulator, IBBI. The exchanges' investor protection funds pay when a broker fails, not when a company defaults.
To Shivam_Gupta: no. A company in insolvency stops paying interest, and the full amount at maturity is not promised. What you get is set by the rescue plan: your place in the queue, your vote and your holding size. A small secured holder who bought DHFL at a discount in 2019 did get the full principal in 2021, but nobody could have known that when buying.
To Arun_Roy: yes. Secured DHFL bonds up to ₹2 lakh in one series got 100% of principal in cash, in September 2021.
Before: spread out, prefer secured bonds, watch the price, keep your details current. After: read the trustee's notice, vote, and know your class and slab before you sell.
Case filesDHFL ended better than most. The 21 case files below show the full range: holders paid in full and with interest (Essel's fund holders, Vodafone Idea's), holders still waiting 8 years on (IL&FS), and holders who got under 1% (Sahara). Open any of them.
Where to find today's figures
Figure
How often it changes
Where to find it
Whether your bond has defaulted
As it happens
Your demat statement and CAS; the company's NSE or BSE filings
Trustee notices and meetings
After each event
The debenture trustee's website, listed by company and ISIN
21 real cases. In the first 8, retail investors held the bonds, debentures or deposits themselves. In the rest, most retail money came in through mutual funds, provident funds or shares. Each opens to the same facts: who held the bonds, the rating path, the warning signs, the prices, the cover claimed, the road taken, what the assets fetched, what holders got and how long it took. Where a figure was never published, the card says so. Tap a case to open it.
DHFL (Dewan Housing Finance)2019 to 2021, home loan companyHolders got: 100% of principal up to ₹2 lakh; FDs 23%
DHFL, an AAA rated home loan company, sold NCDs (company bonds) and fixed deposits to retail investors. Its bonds fell to about 60% of face in Jan 2019, it stopped paying in mid 2019, and Piramal bought it in Sep 2021.
Who held it
About 36,700 retail investors in ₹1,000 public issue NCDs, plus FD holders, banks and mutual funds, so debt fund investors too.
Rating path
CARE AAA to AA+ by letter of 1st Feb 2019 (disclosed 4th Feb); D on 5th Jun 2019.
Warning signs
Shares fell 42.6% on 21st Sep 2018 after DSP Mutual Fund sold DHFL paper at about 11% (press report). After allegations by Cobrapost on 29th Jan 2019, NCDs fell while still AAA.
Prices
DHFL-NX, a 9.10% NCD of ₹1,000 face, traded at about ₹602 on 31st Jan 2019. A fund valued DHFL NCDs at ₹20.87 on 13th Feb 2020 and ₹10 on 19th May 2020, about 21% and 10% of face.
Cover claimed
100% asset cover (pledged loans at least equal to the bonds), per the 2016 public issue record.
Default and route
Missed ₹961.95 crore of NCD interest due 4th Jun 2019, cured within the grace period; hard default in Jul 2019. The insolvency court (IBC) admitted it on 3rd Dec 2019.
What the assets fetched
₹34,250 crore: ₹14,700 crore cash plus ₹19,550 crore of 10 year 6.75% Piramal NCDs, against about ₹87,248 crore admitted. Reported liquidation value (fire sale value) ₹26,850 crore; fair value ₹42,492 crore.
Who bought
Piramal Capital & Housing Finance, backed by about 94% of creditors over a rival Oaktree bid.
What holders got
Actual payout. Secured NCDs, per series: up to ₹2 lakh, 100% of principal in cash; ₹2 lakh to ₹10 lakh, 43.82% of admitted claim in cash; above ₹10 lakh, 43.29%, as 19.67% cash and 23.62% new Piramal NCDs. FD holders: 23.08% in cash, any amount. Shareholders: nil.
Time to money
Cash came on 29th to 30th Sep 2021, about 2 years 4 months after the first missed payment.
Hi…I am FD holder having investment less than 2 lacs but got credit of only 23% of admitted claim.
SREI Infrastructure Finance and SREI Equipment Finance2020 to 2023, infrastructure and equipment lendersHolders got: secured about 7.3% cash at first, rest in new paper
The 2 SREI finance companies, one for infrastructure and one for equipment, sold NCDs (company bonds) to retail investors. After rating cuts and a special audit, RBI took over both boards in Oct 2021. The government backed bad bank NARCL won them in 2023 and paid mostly in new paper.
Who held it
Retail investors in listed NCDs, plus banks and other lenders. Claims of NCD holders who voted yes: ₹2,453 crore (secured) and ₹1,412 crore (unsecured).
Rating path
SREI Infrastructure at CARE: A- (watch negative); BBB+ on 28th Feb 2020; BB+, below investment grade, on 15th Dec 2020; D on 6th Mar 2021.
Warning signs
On 20th Nov 2020 it disclosed an RBI ordered special audit. SREI Equipment Finance had sought a court scheme with its creditors (NCLT order 30th Dec 2020).
Prices
A SREI Equipment Finance 9.4% NCD traded at ₹101.40 to ₹150 on BSE on 28th Jul 2023, in tiny volumes.
Cover claimed
Not found in public records.
Default and route
RBI removed both boards on 4th Oct 2021, citing "governance concerns and defaults". The insolvency court (IBC) admitted both on 8th Oct 2021 as one case.
What the assets fetched
₹14,867.50 crore at face value, only ₹3,180 crore of it cash. The rest: ₹8,000 crore of OCDs (new bonds that may turn into shares), security receipts (IOUs paid from future recoveries) and 20% of SREI Infrastructure. Admitted financial claims: ₹32,749.26 crore.
Who bought
NARCL with IDRCL, backed by 89.25% of creditors on 15th Feb 2023; Authum also bid.
What holders got
Plan allocation, Oct 2023. Secured, voted yes: about 44.6% on paper by our sum, mostly OCDs and security receipts, only about 7.3% cash at first. Unsecured, voted yes: about 4.4%. Secured, voted no: about 13.7%. Unsecured, voted no: nil.
Time to money
First cash record date 6th Oct 2023, about 2 years after admission. OCDs and security receipts pay later from recoveries; final values not published.
Like DHFL repayment 100% repayment given to small investor less than 2 lakhs did any such provision has been made to SREI small NCD holder
Reliance Home Finance (RHFL)2019 to 2023, home loan companyHolders got: 100% of principal up to ₹5 lakh; others about 21% to 28%
Reliance Home Finance sold listed NCDs (company bonds) to retail investors and borrowed from banks. Its rating fell from AA to default grade in about 7 months, and its bonds traded at yields near 50% by Apr 2019. Lenders sold the business to Authum in Mar 2023, outside the insolvency court.
Who held it
Retail investors in listed public issue NCDs, plus banks and other lenders. Lender debt was over ₹11,541 crore; the plan covered 89 NCD series.
Rating path
CARE: AA+ to AA on 8th Oct 2018; A+ on 6th Mar 2019; NCDs to C and bank loans to D on 26th Apr 2019; NCDs to D on 13th Sep 2019.
Warning signs
On 4th May 2019 the company admitted a "minor delay" on ₹542 crore of principal due to 5 to 6 banks. Auditor PwC resigned on 11th Jun 2019.
Prices
End Apr 2019 on NSE: series N2 at ₹829 (yield about 50%), N4 at ₹650, N6 at ₹625, each down 12% to 20% in a day.
Cover claimed
Not found in public records.
Default and route
Not the insolvency court. Lenders used RBI's 7th Jun 2019 framework for stressed loans: an inter creditor agreement, where lenders agree a plan together. Bids invited Jul 2020; Authum picked Jun 2021; Supreme Court approval 3rd Mar 2023.
What the assets fetched
₹3,351 crore by the company's own figure, against lender debt of over ₹11,541 crore.
Who bought
Authum Investment & Infrastructure, through its unit Reliance Commercial Finance, which took over the whole business. About 99% of lenders approved.
What holders got
Plan terms, per the company's directors' report: individuals and HUFs holding up to ₹5 lakh got 100% of principal; others got 27.71% (secured) and 20.78% (unsecured). The NCDs were then extinguished in demat as a "Redemption", so they vanished from accounts. Some retail holders went to the Supreme Court asking for 100% of principal.
Time to money
Deal closed 29th Mar 2023, about 3 years 11 months after the first D rating. The route outside court was not faster.
Lesson. A plan agreed outside court still took about 4 years, and only the smallest holders got their principal back.
Reliance Capital2019 to 2025, finance companyHolders got: small secured 100% of principal; other secured 42.73%; unsecured 5%
Reliance Capital borrowed through NCDs (company bonds) and bank loans and planned to repay by selling its investments. The sales ran late, ratings fell all through 2019, and its auditor quit in Jun 2019. After the insolvency court process, the Hinduja group's IIHL bought it for ₹9,661 crore in cash, less than its estimated liquidation value.
Who held it
Lenders, including individuals and HUFs who held secured NCDs. Admitted claims were ₹26,086.75 crore, of which secured ₹22,122.81 crore.
Rating path
CARE: AA+ to AA on 8th Oct 2018; A+ on 6th Mar 2019; A on 19th Apr 2019; BBB on 18th May 2019; BB, below investment grade, on 24th Aug 2019.
Warning signs
Agencies cited "delay in monetising the non-core investments" from Feb 2019. The company called the Apr 2019 cut "Completely Unjustified". PwC resigned as auditor on 11th Jun 2019, saying its queries got no satisfactory response.
Prices
Not found in public records.
Cover claimed
Not found in public records.
Default and route
RBI removed the board on 29th Nov 2021. The insolvency court (IBC) in Mumbai admitted the case on 6th Dec 2021.
What the assets fetched
₹9,661 crore, all cash, 37.03% of admitted claims. That was below the reported liquidation value (fire sale value) of ₹13,158.46 crore and fair value of ₹16,696.05 crore. Shareholders got nil.
Who bought
IndusInd International Holdings (IIHL), Hinduja group, backed by 99.60% of the lenders' committee. Torrent had won the first auction round at ₹8,640 crore in Dec 2022.
What holders got
Plan terms, all cash. Individuals and HUFs with up to ₹10 lakh of secured NCD principal who voted yes: 100% of principal. Other secured holders, including those who voted no: 42.73% of admitted claims. Unsecured, voted yes: 5%. Unsecured, voted no: nil.
Time to money
Plan approved 27th Feb 2024; implemented 19th Mar 2025, about 3 years 3 months after admission and nearly 6 years after the auditor quit. The court gave 90 days; approvals stretched it to about 13 months.
Lesson. An auditor quitting over unanswered questions was a clear exit signal, years before any money came back.
Yes Bank AT1 bonds2020 to 2026, private bank rescued under an RBI schemeHolders got: nothing yet; write off struck down in Oct 2026
Yes Bank sold AT1 bonds (bank capital built to absorb losses) to its own customers, some as a "Super FD". On 14th Mar 2020, a day after a rescue scheme began, its administrator wrote all ₹8,415 crore to zero. On 15th Oct 2026 the Supreme Court held that void.
Who held it
₹3,000 crore at 9.50% (2016) and ₹5,415 crore at 9.00% (2017). SEBI found 1,346 individuals put in about ₹679 crore; 277 broke fixed deposits to do it. Mutual funds held more.
Rating path
ICRA: AA until Sep 2018; A in May 2019; BBB- on 20th Feb 2020; D on 6th Mar 2020.
Warning signs
5 ICRA cuts from Nov 2018; a yield above 19% on 2nd Mar 2020; RBI moratorium on 5th Mar 2020.
Prices
Valuers and funds marked them down 35% to 47.5% around 6th Mar 2020, and to zero by 12th Mar 2020.
Cover claimed
None by design: unsecured, ranked just above shares.
Default and route
No missed coupon; the loss was the write off. The Bombay High Court quashed it on 20th Jan 2023. On 15th Oct 2026 the Supreme Court dismissed appeals by Yes Bank, RBI and the Union: the final scheme had dropped the write off clause, and only RBI could order one. SEBI fined Yes Bank ₹25 crore for mis selling in Apr 2021.
What the assets fetched
Not applicable: the bank was rescued, not sold off.
Who bought
SBI committed ₹6,050 crore for new shares; Japan's SMBC held 24.99% by 2026.
What holders got
No cash yet. The bonds are restored; the court said coupons "must be made in terms of the Information Memoranda" but ordered no lump sum. Yes Bank says restoring them would cut its core capital ratio by about 250 basis points.
Time to money
None after 6 years 7 months.
So many retired employees were sold this bond in the guise of better earning deposit by the RM.
Jaypee group2014 to 2026, cement, expressway and township builderHolders got: JAL FDs repaid late; JIL FDs principal only
Jaiprakash Associates (JAL) and its arm Jaypee Infratech (JIL) took fixed deposits from retail investors. A 2014 law forced quick repayment, and both fell behind. JAL paid depositors by 2017 after selling cement plants; JIL went into insolvency, and its depositors who filed claims were promised principal only.
Who held it
Retail investors held company FDs (unsecured loans to a company): JAL ₹2,722.53 crore across 1,78,704 FDs; JIL ₹390.89 crore across 46,253 FDs. NCDs and FCCBs (dollar bonds convertible into shares) went to institutions.
Rating path
Not found in public records.
Warning signs
Apr 2014: new deposits stopped; Dec 2014: FD delays, which JAL called "minor"; Jan 2015: sister firm Jaiprakash Power warned of a bond default.
Prices
FDs have no market. No bond trade prices found.
Cover claimed
FDs: unsecured. NCDs: secured, cover ratio not found.
Default and route
JAL FDs: repaid outside insolvency under tribunal extensions to 30th Jun 2017. FCCBs: coupon missed on 7th Mar 2016, swapped for new bonds in 2017 that also defaulted. Insolvency: JIL from 9th Aug 2017; JAL from 3rd Jun 2024.
What the assets fetched
JAL cement plants: ₹16,189 crore, Jun 2017. JAL plan: ₹14,084.20 crore against ₹57,497.93 crore of admitted claims.
Who bought
UltraTech bought the plants; Suraksha group took JIL in Jun 2024; Adani took JAL in May 2026.
What holders got
JAL FDs: principal plus contract interest in cash; delay interest ordered in 2019 is still in court. JIL FDs: ₹247.14 crore repaid by Jul 2017; in the plan, filed claims of ₹29.26 crore get 100% of principal, no interest, in 3 instalments; about ₹90 crore never filed and got nothing. FCCBs: US$27.60 million cash plus new paper. Lenders, on paper: JIL about 79%, mostly land; JAL secured lenders 26%.
Time to money
JAL FDs: 1 to 3 years late, last paid around Jul 2017. JIL FDs: about 9 years from 2015 maturities to the Jun 2024 takeover; payout dates not published.
I got all my interest till the company was doing fine but on the time of maturity the company went under and I haven't got back my principal ever since.
Sahara's debentures2008 to 2026, 2 Sahara companies sold bonds door to doorHolders got: under 1% back through SEBI after 15 years
From 2008 to 2011, 2 Sahara companies sold OFCDs (optionally fully convertible debentures, bonds that could turn into shares) door to door through agents. They called it a "private placement", yet raised ₹25,781.37 crore from about 3 crore investor accounts, entirely outside the stock market. The Supreme Court ordered a full refund in 2012, but almost none has reached bondholders through SEBI.
Who held it
Direct retail investors: ₹24,029.73 crore outstanding in Aug 2011 across 2.96 crore accounts, mostly tickets of ₹2,000 to ₹3,000. The number of distinct people is disputed.
Rating path
Never rated, one of the violations SEBI recorded.
Warning signs
A "private placement" sold to crores of people, though by law an offer to 50 or more persons must be listed. No rating, trustee, listing or security. SEBI stopped the issue on 24th Nov 2010.
Prices
None. Never listed or traded, and no mutual fund held them.
Cover claimed
None. Unsecured, with no charge on any assets and no debenture trustee.
Default and route
No missed coupon; the default is the failure to refund. SEBI ordered a refund with 15% a year interest on 23rd Jun 2011, and the Supreme Court upheld it on 31st Aug 2012. Sahara paid ₹5,120 crore and claimed it had repaid the rest in cash; the court found "no acceptable proof".
What the assets fetched
SEBI had recovered about ₹16,379 crore of principal by Mar 2026, about 63.5%. The court sent ₹10,000 crore of it to depositors of Sahara cooperative societies, a separate group.
Who bought
No buyer yet. A 2025 plea to sell the remaining assets to Adani Properties is pending.
What holders got
Through SEBI: ₹138.07 crore by bank transfer to 17,526 applicants, full principal plus 15% interest. That principal, ₹70.09 crore, is about 0.29% of what was outstanding. No refund since about Dec 2021.
Time to money
Paid claimants: about 2 to 10 years after the 2011 order. Everyone else: nothing, 15 years on.
"I haven't heard of any person who got money back"
CRB Capital Markets1997 to 2026, finance company taking public deposits, plus a mutual fundHolders got: principal only, up to ₹50,000, starting 14 years late
CRB Capital Markets, an NBFC (a finance company, not a bank) run by C.R. Bhansali, took fixed deposits and sold "Esteem Bonds" to retail investors; its group also ran a mutual fund. It kept paying depositors until RBI froze it on 9th Apr 1997. A month later its offices were shut, and 29 years on it is still in provisional liquidation.
Who held it
Direct retail investors: 1,34,000 deposit and bond holders, mostly small tickets. 19,396 investors also put ₹229.28 crore into the group's mutual fund in 1994.
Rating path
Press reports disagree on CARE's Sep 1996 grade. RBI's petition cites a cut to CARE (FD) C, high risk, after the freeze.
Warning signs
SEBI barred the group's mutual fund from new schemes in Apr 1996; high deposit rates with heavy broker incentives; RBI's in principle nod for a CRB bank was put on hold in Dec 1996, while the prospectus still said the bank would open shortly.
Prices
The deposits did not trade. The fund's NAV was ₹4.95 per ₹10 unit in Mar 1997.
Cover claimed
None; all unsecured. Asked by RBI for a list of assets, the company listed only liabilities.
Default and route
RBI banned new deposits and asset sales on 9th Apr 1997 and filed to wind the company up on 21st May 1997. A 2006 revival scheme, part cash and part shares, was struck down in 2012. The petition was still undecided on 21st Sep 2026.
What the assets fetched
₹17.58 crore in cash by Sep 2002. In Apr 2024 the court ordered ₹25 crore paid for the group's share of 3 land parcels.
Who bought
No one. There was no sale or resolution plan.
What holders got
Depositors: principal only in cash, no interest, capped at ₹50,000. By Jan 2024, ₹66.31 crore was paid on ₹115.21 crore of claims; many were rejected because depositors could not be traced. Fund holders: ₹13.48 per ₹10 unit by 2021, but the court found only about ₹79 crore of ₹211 crore paid went outside the CRB group.
Time to money
About 14 years to the first deposit payments; some are still unpaid.
Lesson. A finance company can pay on time right up to the day it is frozen, and unsecured depositors then wait decades for their principal alone.
IL&FS group2018 to now, infrastructure lender and road builderHolders got: about 23% so far, partly in units
IL&FS was a AAA rated infrastructure group owned by LIC, ORIX, HDFC and SBI. It stopped paying in Sep 2018, and 8 years later creditors of its 3 main companies are still being paid in rounds.
Who held it
No retail public issue was found for IL&FS, IFIN (lending arm) or ITNL (road arm). Banks, funds, insurers and PF and pension trusts held private bonds and commercial paper (short loans to companies). Retail investors were in only through debt funds and PF or pension savings.
Rating path
IL&FS at ICRA: AAA until 6th Aug 2018, D on 17th Sep 2018, 42 days later. ITNL's AA+(SO) bonds, rated on a parent's promise, fell with it.
Warning signs
Over ₹16,000 crore stuck in unpaid project claims; ITNL debt 7.21 times equity; a SIDBI loan default reported on 4th Sep 2018.
Prices
No exchange trades found. Tata Money Market Fund marked its CP at 50%, then 0% on 29th Oct 2018.
Cover claimed
None found for IL&FS or IFIN; the AAA rested on famous shareholders. ITNL's structured bonds had only a parent promise.
Default and route
IL&FS missed CP on 14th Sep 2018. The bankruptcy code then excluded NBFCs (finance firms that are not banks), so the government used the Companies Act. NCLAT froze all payments on 15th Oct 2018, with about ₹99,355 crore owed.
What the assets fetched
Target: ₹61,000 crore, about 61% of debt; ₹50,387 crore cleared by 30th Jun 2026.
Who bought
ORIX took 7 wind farms; 6 roads went to Roadstar InvIT (a listed trust that owns roads); Cube Highways bought a tunnel for ₹6,145 crore.
What holders got
Interim payouts in cash and InvIT units. By 21st Mar 2025, the holding companies' creditors had about ₹11,000 crore of about ₹48,000 crore owed, roughly 23%. Secured lenders to healthy road firms got 83% to 124%.
Time to money
IFIN creditors first got cash in Feb 2023, about 4 years 5 months after default; IL&FS and ITNL creditors in late 2023. No final payout yet.
Considering the recent negative news surrounding ILFS, DHFL bonds, do you think it is safe to invest in bonds?
Altico Capital2019, lender to property developersHolders got: about 73% in cash, via funds
Altico Capital lent to property developers and was rated AA-, with capital equal to 43% of its risky assets. On 3rd Sep 2019 India Ratings cut it one notch, which let lenders demand early repayment, and 9 days later Altico missed an interest payment. Lenders sold its loan book to Ares SSG in Mar 2021.
Who held it
Private NCDs at ₹10,00,000 and up, plus bank loans; no public issue found. Retail investors were in mainly through debt funds, which held ₹537 crore in Aug 2019: UTI about ₹334 crore and Reliance (now Nippon) about ₹204 crore.
Rating path
India Ratings: AA- until 3rd Sep 2019; A+; NCDs C on 13th Sep; D by 30th Sep 2019. CARE cut AA- to B on 12th Sep 2019.
Warning signs
Top 10 borrowers were 94% of net worth; 70% of loans on moratorium (a repayment holiday) in Jun 2019; PwC quit as auditor; the chairperson resigned on 3rd Sep 2019.
Prices
No exchange prices found. On 13th Sep 2019 funds marked the paper to 25% of face.
Cover claimed
A first charge (a claim) on all loan repayments; no certified cover ratio found. By 31st Mar 2020 net loans were only about 1.05 times debt.
Default and route
Missed ₹19.97 crore of interest on a Mashreqbank foreign loan on 12th Sep 2019. Lenders ran the rescue outside the bankruptcy code.
What the assets fetched
About ₹2,800 crore for all loans and investments, against ₹4,361.55 crore of debt at default.
Who bought
Ares SSG funds with ACRE, a bad loan buyer, after Apollo, Varde and Kotak dropped out.
What holders got
Lenders shared about ₹2,983 crore, about 63% to 69% of what was owed (from the accounts), plus ₹250 crore in Dec 2019. Nippon's side pocket (a separate pot for the bad bond) got back 72.63%, all cash. Direct holders' recovery: not published.
Time to money
₹250 crore on 30th Dec 2019; main payout on 12th Mar 2021, about 18 months after default; final payment on 10th Mar 2022.
Essel group and the FMPs2019 to 2026, Zee promoter firms borrowed against pledged sharesHolders got: full value plus interest, 133 to 170 days late (Kotak FMPs)
Zee promoter companies borrowed through NCDs (non convertible debentures, company bonds) backed only by pledged Zee and Dish TV shares. Mutual funds bought them, many inside fixed maturity plans (FMPs, debt funds that close on a set date). Zee fell 26.6% on 25th Jan 2019, and FMPs maturing in Apr 2019 paid only part of the money on time.
Who held it
Mutual funds, about ₹6,638 crore in Mar 2019. Retail investors held fund units only; Essel paper was 9.92% to 20.69% of each of 6 Kotak FMPs.
Rating path
Brickwork: A+ (SO), resting on the share pledge, in Aug 2018; A (SO) on 18th Feb 2019. Never below investment grade while Kotak held it.
Warning signs
Promoters had pledged 59.37% of their Zee stake by Dec 2018; on 13th Nov 2018 they said they would sell up to 50% of Zee; FMP portfolios showed up to 21% in little known Essel names.
Prices
The NCDs never traded. Zee closed at ₹318.40 on 25th Jan 2019, from ₹433.85.
Cover claimed
Shares worth at least 1.5 times the loan. No free shares were left to top up. SEBI has required 4 times cover since Oct 2019.
Default and route
No court case. On 3rd Feb 2019 lenders agreed not to declare a default until 30th Sep 2019, a standstill, and Kotak pushed its NCD maturity to that date. SEBI said it did not recognise such standstills.
What the assets fetched
Promoters sold about 11% of Zee at ₹400 a share, up to ₹4,224 crore, in Jul 2019.
Who bought
Invesco Oppenheimer bought the Zee shares. No buyer of the bonds was found; HDFC AMC took up to ₹500 crore of the paper from its own FMPs at marked down value.
What holders got
Kotak FMPs paid 83.2% at maturity and the rest, with interest, in cash in Sep 2019. HDFC holders got cash at the marked down value, or a rollover.
Time to money
Kotak FMPs: 133 to 170 days late. One HDFC FMP was extended 380 days.
"conservative retail investors will think twice before investing in hitherto safest alternative to FD's"
Coffee Day Enterprises2019, parent company of Cafe Coffee DayHolders got: about 83% of principal, no interest
Coffee Day Enterprises, the listed parent of Cafe Coffee Day, had group debt of ₹7,653 crore in Mar 2019. Its founder V.G. Siddhartha died on 29th Jul 2019, and the group began missing payments within weeks. It sold assets to repay most lenders; the 2 holders of its ₹200 crore bond settled in 2025.
Who held it
The NCD was unlisted and unrated, at ₹10 lakh per bond, held by 2 funds. Retail investors were in only through shares and debt funds, which held about ₹193 crore of 2 group firms' NCDs, mostly in DSP Credit Risk Fund.
Rating path
ICRA on CDEL's loans: BBB+ in Nov 2018; BB+ on 8th Aug 2019; D on 10th Sep 2019.
Warning signs
Tax searches in Sep 2017; Mindtree shares frozen by tax officers in Jan 2019; debt 13.3 times operating profit in Mar 2019; heavy share pledges; ₹842 crore owed by a promoter firm, MACEL.
Prices
No trades in the NCD. On 30th Jul 2019 DSP marked a group firm's NCD at about ₹50 per ₹100 of face.
Cover claimed
A pledge of shares in the cafe arm, CDGL; no cover ratio found.
Default and route
CDEL missed its NCD coupon on 30th Sep 2019. An insolvency case was admitted in Aug 2024 but quashed on 27th Feb 2025, because holders had not voted for it. SEBI found ₹3,535 crore moved to MACEL.
What the assets fetched
The Mindtree stake: up to ₹3,269 crore. A tech park: ₹2,700 crore. The group said it repaid about ₹4,000 crore by Mar 2020.
Who bought
L&T bought Mindtree; Blackstone and Salarpuria Sattva bought the tech park.
What holders got
A ₹205 crore settlement: ₹111.22 crore in cash plus ₹55 crore from selling pledged shares, ₹166.22 crore so far, about 83% of principal, interest waived. A further ₹50 crore in 2028 depends on targets. Fund holders' final recovery is not published.
Time to money
First cash on 9th Apr 2025, about 5 years 6 months after the missed coupon; second on 10th Jul 2025.
DSP Credit Risk Fund yesterday wrote off it's exposure to NCDs of Coffee Day by 50%.
Cox & Kings2019, listed travel companyHolders got: no payout found so far
Cox & Kings, a listed travel company, reported a ₹824 crore profit on 31st May 2019. On 26th Jun 2019 it failed to repay ₹150 crore of commercial paper. No buyer came forward in insolvency, a court ordered it wound up in Dec 2021, and the ED alleged ₹3,908 crore of sales to fake customers.
Who held it
No retail public issue found. Commercial paper (short loans to companies) and NCDs were placed privately, each with 1 or 2 holders, mostly banks. Retail investors were in only through UTI Mutual Fund schemes (a ₹152.46 crore claim) and shares.
Rating path
CARE: AA- with CP at A1+ on 17th Jun 2019; CP D on 1st Jul 2019; all D by 11th Jul 2019, 24 days in all.
Warning signs
63.28% of promoter shares pledged (given as loan security); shares down from ₹211.90 in Oct 2018 to about ₹50 by Jun 2019; dues from customers up to ₹2,418 crore in FY19.
Prices
No bond or CP trades found. Shares fell to ₹2.20 by 22nd Oct 2019 and were delisted in Feb 2023.
Cover claimed
CP and the 9% NCD were unsecured; one ₹50 crore NCD had flats and pledged shares. Later ₹2,586.10 crore of customer dues were set aside as losses.
Default and route
About ₹843 crore of CP was missed from Jun to Sep 2019. NCLT admitted insolvency on 22nd Oct 2019. No resolution plan came, and liquidation (selling off what is left) was ordered on 16th Dec 2021.
What the assets fetched
Admitted claims: ₹8,906.43 crore. The reserve price for the whole business fell from ₹100 crore in Oct 2022 to ₹10.98 crore in Apr 2024. No sale results were found.
Who bought
Wilson & Hughes of Singapore bought the brand in Jun 2024 for an undisclosed sum.
What holders got
Nil found. The liquidator's Aug 2025 filing shows no payout to any lender class. Shareholders got nothing.
Time to money
No payout found up to Aug 2025, more than 6 years after the first default.
So those type of stocks cannot be sold? (I'm a newbie)
Sintex Industries2019 to 2023, Gujarat textile and yarn makerHolders got: about 47 paise per rupee after nearly 4 years (secured lenders)
Sintex Industries split off its plastics business in 2017 and was left as a textile company building a costly spinning plant on debt. It missed an NCD (non convertible debenture, a company bond) payment on 11th Jun 2019 and entered insolvency in Apr 2021. Reliance Industries and a partner bought it in 2023.
Who held it
Private placements of ₹10 lakh each, held by LIC, banks, a pension trust and Invesco India Credit Risk Fund (₹15 crore). Retail investors were exposed only through funds, LIC policies, the pension trust and the shares.
Rating path
CARE: AA+ (Jul 2016); A (Jul 2017); A minus, "Issuer Not Cooperating" (Jan 2018); BB+, below investment grade (Jul 2018); D (12th Jun 2019).
Warning signs
Stopped giving CARE information from Jan 2018; promoters had pledged 84.95% of their shares by Dec 2018; the plant's cost rose from ₹3,300 crore to ₹4,090 crore.
Prices
No NCD trades found. DSP marked bonds of sister firm Sintex-BAPL to about ₹28 per ₹100 by Aug 2019.
Cover claimed
Called "secured", and admitted as secured debt in the insolvency case. Cover ratio: not published.
Default and route
Missed ₹88.87 crore of interest and principal on 11th Jun 2019. Lenders rejected out of court plans in 2019. Invesco filed under the IBC (insolvency law) on 6th Nov 2019; admitted 17 months later.
What the assets fetched
Claims ₹7,802.15 crore; winning plan ₹3,651.32 crore, only ₹18.51 crore above liquidation value.
Who bought
Reliance Industries with Assets Care and Reconstruction Enterprise, backed by 98.88% of lender votes. Approved 10th Feb 2023.
What holders got
Secured lenders who voted yes: 47.45%, mostly cash, about 5% as unlisted shares. A secured lender that voted no: 36%. Unsecured lenders: 5.85%. Shareholders: nothing.
Time to money
1,386 days, about 3 years 9 months, to 28th Mar 2023.
Lesson. Sintex fell below investment grade and stopped talking to its rating agency a year before it missed a payment, and even secured lenders got back less than half after nearly 4 years.
Lakshmi Vilas Bank Tier 2 bonds2020, private bank merged into DBS Bank IndiaHolders got: nothing, written off to zero
Lakshmi Vilas Bank ran out of capital after 2 years of losses. On 26th Nov 2020, a day before it merged into DBS Bank India, RBI had it write off ₹318.20 crore of Tier 2 bonds. Depositors were moved across in full; bondholders are still in court.
Who held it
3 series of Tier 2 bonds (bank capital that absorbs losses), privately placed and listed, at ₹5 lakh or ₹10 lakh each. Holders: individuals, HUFs, trusts and small firms; no count published.
Rating path
CARE: A- until Jul 2017; BB+, below investment grade, on 11th Oct 2019; B- on 9th Oct 2020; D on 27th Nov 2020.
Warning signs
Net losses of ₹894 crore in FY19 and ₹836 crore in FY20; RBI's PCA (a watch list for weak banks) from 27th Sep 2019; capital adequacy of 0.17% in Jun 2020.
Prices
BSE reported deals per ₹100 of face: 91.80 in Nov 2019; 108.90 on 10th Sep 2020, with capital at 0.17%. The market never priced in a wipeout.
Cover claimed
None. Unsecured, ranked below depositors, and the terms allowed a full write off before any RBI ordered merger.
Default and route
No missed coupon found; the loss was RBI's write off. A moratorium came on 17th Nov 2020, and the merger took effect on 27th Nov 2020.
What the assets fetched
No sale. The whole bank, with about ₹20,000 crore of deposits, passed to DBS Bank India with nothing paid to shareholders or Tier 2 holders.
Who bought
DBS Bank India, owned by DBS Bank of Singapore.
What holders got
Nil. In Apr 2024 the Madras High Court told RBI to decide again; the Supreme Court stayed that in Jul 2024.
Time to money
None after 5 years 11 months; appeals are listed for after Diwali 2026. The Yes Bank AT1 win of 15th Oct 2026 may not help, since LVB's write off came before its merger took effect.
I also heard tier 2 bonds are safe. But the Reserve Bank of India’s (RBI) is to write off Basel III-compliant tier 2 bonds of Lakshmi Vilas Bank (LVB) as well
Future Retail and Future Enterprises2020 to 2026, Big Bazaar retailer and its sister companyHolders got: nothing yet at FRL; a small interim payout at FEL
Future Retail (FRL) raised US$ 500 million in Jan 2020 and sent it all to sister firm Future Enterprises (FEL) 6 days later. Lenders voted down a ₹24,713 crore sale to Reliance in Apr 2022; both remain in insolvency in Oct 2026.
Who held it
Institutions. The 5.60% US$ notes were not sold in India; rupee NCDs (company bonds) were ₹10 lakh private placements, 1 to 8 holders each. Retail investors lost via shares and Franklin Templeton debt funds holding promoter NCDs.
Rating path
FRL: CARE AA- to Negative Jul 2019, A+ Mar 2020, B Oct 2020, D 1st Jan 2022. FEL: AA- Jul 2019 to D 19th Aug 2020.
Warning signs
Negative outlook 8 months before COVID; the 2 firms guaranteed each other's loans; FRL debt up about 2.7 times in 11 months; 74.90% of promoter shares pledged by Jun 2020.
Prices
US$ notes, cents per dollar: 88 in Jan 2021, 69.6 in May 2021, 8.5 in Aug 2022. No rupee NCD trades found. Franklin valued promoter NCDs at zero in 2020.
Cover claimed
US$ notes: a floating charge (claim on changing assets) over fittings in rented stores. NCDs: 1.10 times (FRL) and 1.25 times (FEL) on fixed assets.
Default and route
FEL missed NCD interest on 17th Aug 2020. FRL got an RBI one time restructuring (COVID loan recast), then missed ₹3,494.56 crore on 31st Dec 2021. IBC insolvency: FRL Jul 2022, FEL Feb 2023; FRL liquidation Jul 2024.
What the assets fetched
FRL: the only whole company bid, about ₹550 crore against ₹27,415.34 crore of claims, was rejected; the liquidator (court appointed seller) auctions scrap. FEL: ₹508 crore for insurance stakes.
Who bought
FEL: Central Bank of India bought the insurance stakes; creditors chose Orissa Metaliks for the rest in Sep 2026, court approval pending. FRL: no buyer for the whole company.
What holders got
FRL bondholders: nothing yet. FEL debenture holders: interim cash, record date 1st Aug 2025, amount not published; ₹508 crore is about 4.1% of FEL's ₹12,265 crore of claims. Shareholders: nothing expected.
Time to money
FEL: about 5 years to a first small payout. FRL: nothing after 4 years 10 months.
Lesson. A secured bond is only as safe as its security; Future's was store fittings, later sold as scrap.
Reliance Communications2017 to 2026, Anil Ambani group telecom companyHolders got: nothing so far, 9 years 8 months on
RCom carried huge debt and lost its cash flow after Reliance Jio launched free calls and data in Sep 2016. It began missing bond payments in Feb 2017 and entered insolvency in May 2019. Lenders approved a buyer's plan in Mar 2020, but the tribunal never did, and in 2026 the spectrum that plan relied on was taken away.
Who held it
Not retail investors. LIC was the sole investor in a ₹2,000 crore 11.25% NCD (non convertible debenture, a company bond); USD 300 million of notes went to offshore funds. Retail investors held the shares.
Rating path
CARE kept it at A minus until 22nd May 2017, then BB, then D on 30th May 2017. SEBI later fined CARE for acting late.
Warning signs
Jio's free services; debt at 8.48 times EBITDA (yearly operating profit) by Mar 2017; failed Aircel merger and tower sale. A ₹375 crore instalment missed on 7th Feb 2017 was disclosed only on 27th May 2017.
Prices
The USD notes fell from 100 cents at issue to 64 to 69 cents (May 2017) and 40.1 cents (Aug 2018). No NCD trades found.
Cover claimed
Both admitted as secured; no cover certificate found. A 2020 forensic audit alleges "gross overstatement of security".
Default and route
RCom stopped paying in Jun 2017 under a lenders' standstill; the NCDs went unpaid at maturity in 2019. Insolvency (IBC) from 7th May 2019. The Supreme Court ruled on 13th Feb 2026 that spectrum cannot be sold under the IBC; the telecom department cancelled it on 5th Oct 2026.
What the assets fetched
Claims ₹93,602.56 crore. The only cash so far, ₹3,720 crore for the tower arm, went to that unit's creditors.
Who bought
Reliance Jio bought the towers and fibre (Dec 2022). UV Asset Reconstruction's plan for RCom was never approved.
What holders got
LIC and the noteholders: nothing as of 19th Oct 2026. A 2018 cash offer approved by 83% of noteholders never settled. Shareholders: nothing.
Time to money
None yet, 9 years 8 months after the first missed payment.
"if it goes for insolvency, will the stock price become ZERO ?"
Ballarpur Industries2017 to 2023, Avantha group paper makerHolders got: lenders about 17.5%, mostly in new paper
India's largest writing paper maker fell from A+ to D in 9 months to Apr 2017. It defaulted on short term paper held by mutual funds, failed a debt for shares swap, and entered insolvency in Jan 2020.
Who held it
Privately placed: ₹500 crore of NCDs and ₹247 crore of commercial paper (short loans to companies). Taurus MF and IDBI MF held it, so retail investors were exposed only through fund units.
Rating path
India Ratings: A+ before Jul 2016; A- on 15th Jul 2016; BBB- on 11th Jan 2017; D on 19th Apr 2017, "owing to stressed liquidity position".
Warning signs
Jul 2016: sale of the Malaysian unit called off; net debt 9.2 times yearly operating profit in FY2016. Public on BSE.
Prices
Not found for the NCDs or CP. Lenders swapped debt for shares at ₹15.83 in Jul 2017; the plan later cut those by 94.89%.
Cover claimed
Not found for the NCDs. Liquidation value in insolvency: ₹649.01 crore.
Default and route
First reported default in Feb 2017, on Taurus MF's paper; IBC admission 17th Jan 2020; liquidation ordered in Jan 2022, then set aside; plan approved 31st Mar 2023.
What the assets fetched
A ₹700 crore plan against ₹3,514.48 crore of admitted claims: ₹199 crore cash, ₹393.25 crore of new 3 year NCDs, ₹49.87 crore of preference shares.
Who bought
Finquest Financial Solutions, a distressed debt NBFC that bought SBI's ₹50 crore loan and filed the petition; it took 85% of the equity.
What holders got
Plan allocation to financial creditors: about 17.5% of ₹3,174.73 crore admitted, only about 3.5% in upfront cash. Actually issued: ₹326.25 crore of 7% NCDs in late 2023; ₹21.33 crore of preference shares, redeemed Jun 2025. Fund unitholders' recovery: not published.
Time to money
About 6 years 4 months to the upfront cash; NCDs due about Jun 2026, payment not found.
Company went through bankruptcy. I don't think new owner will be in hurry to re-list.
Amtek Auto2015 to 2021, car parts maker that borrowed to buy firms abroadHolders got: about 83% in cash, via funds
Amtek Auto missed repayment of an ₹800 crore secured bond on 20th Sep 2015, 25 days after it traded at ₹100. About ₹200 crore of it sat in 2 JPMorgan debt funds, which sold it in Dec 2015 at about ₹83 per ₹100. Banks got a plan worth about 21% of claims in Dec 2021.
Who held it
A 10.25% NCD (a company bond) sold privately in ₹10,00,000 tickets to banks and 56 wealthy individuals. Retail investors came in only through 2 JPMorgan debt funds; it was 15% of one.
Rating path
CARE AA-, suspended on 7th Aug 2015 with no downgrade first. Brickwork A+ to C in Aug 2015, D around 7th Oct 2015.
Warning signs
Asset charges due by Nov 2012 still incomplete; a ₹158 crore quarterly loss; shares down 37% in a day on 20th Aug 2015.
Prices
₹100 on 26th Aug 2015; marked to ₹75 on 28th Aug, cutting fund NAVs 3.38% and 1.73%; sold at about ₹83 on 5th Dec 2015.
Cover claimed
Called "secured", but charges on assets were only partly in place. No cover ratio found.
Default and route
Missed ₹800 crore plus interest on 20th Sep 2015, then repaid the 56 individuals first; SEBI fined Amtek ₹15,00,000. JPMorgan capped withdrawals at 1% of units a day, then moved the bond to a side pocket (a separate pot for the bad bond). Bankruptcy case from Jul 2017.
What the assets fetched
A ₹4,025 crore plan from 2018 was never paid. The final plan: about ₹2,696 crore against ₹12,604.60 crore of claims, only ₹500 crore upfront.
Who bought
Deccan Value Investors, a US hedge fund. The funds sold their bonds to an unnamed buyer.
What holders got
Fund investors: about ₹83 to ₹85 per ₹100, in cash. The 56 individuals: apparently paid in full, ruled illegal by SEBI. Banks: about 21% on the plan, about 4% as upfront cash.
Time to money
Fund investors: 78 days after default. Banks: upfront cash in Dec 2021, about 6 years later; later payouts not published.
The trouble with Amtek Auto is however more to do with it's continuously reducing interest coverage ratio.
Franklin Templeton's 6 debt funds2020 to 2025, fund house shut 6 debt schemesHolders got: 109.25% in cash, over about 3 years
On 23rd Apr 2020 Franklin Templeton shut 6 debt funds worth ₹25,648 crore, saying it could not sell their bonds fast enough to pay redemptions. Unitholders could not take out a rupee for 10 months, then got back more than the shutdown value, in cash.
Who held it
3,15,600 unitholders in 6 open ended debt funds. Retail money came in only as fund units, not as direct bondholders.
Rating path
Funds carry no rating. In 3 schemes, AA and below paper rose from about 75% of net assets in Jun 2019 to 88.6% to 101.4% by Mar 2020.
Warning signs
16th Jan 2020: Vodafone Idea written to zero, NAVs down 4.28% to 5.14% in a day; 6th Mar 2020: Yes Bank AT1 bonds marked down 47.5%; then borrowing to pay redemptions. In 5 schemes, 59% to 77% of the portfolio was in issues where Franklin owned over 70%.
Prices
Mostly unlisted paper; investors saw only NAV, which at every payout was above its 23rd Apr 2020 level.
Cover claimed
Not applicable: a fund has no security cover.
Default and route
No missed payment; a wind up. Courts required unitholder consent, and about 97% by number voted yes in Dec 2020. On 12th Feb 2021 the Supreme Court named SBI Funds Management to sell and pay out.
What the assets fetched
₹14,391 crore of cash by 29th Jan 2021 from maturities and prepayments; ₹4,621 crore repaid borrowing. All performing assets were sold by Aug 2023.
Who bought
Not published for individual papers.
What holders got
₹27,548.21 crore, 109.25% of the 23rd Apr 2020 value; 107.17% to 113.46% by scheme. Actual payouts, all cash; no new paper.
Time to money
36% in Feb 2021, 10 months on; about 70% by Jun 2021; over 100% by Dec 2021; 109.1% by Aug 2023; a last ₹40 crore in May 2025.
Current investor has lost his money if he has invested in these schemes
Lesson. A debt fund full of paper few others will buy can lock you out for months even when the bonds pay; the loss here was time and access, not money.
Vodafone Idea bonds in side pockets2020 to 2023, telecom company's NCDs held by debt fundsHolders got: 100% plus coupons, if they held on
In early 2020, facing about ₹44,150 crore of telecom dues, Vodafone Idea was cut to junk. Debt funds wrote its NCDs to zero or near it and moved them into side pockets (separate units for one bad bond). Vodafone Idea then paid every rupee on time.
Who held it
Mutual funds, such as Franklin Templeton's 6 debt schemes and 3 Nippon India funds. Retail investors held only fund units, then got matching side pocket units in demat.
Rating path
CRISIL A+ until Aug 2019; BBB- by Nov 2019; CRISIL BB, junk, on 24th Jan 2020; CARE BB- on 17th Feb 2020.
Warning signs
Supreme Court ruling on licence dues, 24th Oct 2019; review plea dismissed 16th Jan 2020. All public.
Prices
Franklin wrote the paper to zero on 16th Jan 2020, cutting NAVs 4.28% to 5.14%. Users reported side pocket units quoted at ₹0.45 and sold at ₹0.19 on the exchange in 2020; one Franklin plan later paid about ₹1.43 a unit.
Cover claimed
None: the NCDs were unsecured.
Default and route
No default. Under SEBI's 2018 rule, a junk rating lets a fund split off the bond, give holders on that date equal units and pass any recovery to them. Franklin's side pocket began 24th Jan 2020, Nippon's 17th Feb 2020.
What the assets fetched
Full value at maturity: 8.25% NCD, 10th Jul 2020; 8.04% NCD, 27th Jan 2022; Franklin's 10.90% NCD, ₹1,250 crore plus ₹148.34 crore interest, by 1st Sep 2023.
Who bought
No sale; buyers of units on the exchange not identified.
What holders got
Face value plus coupons, in cash. Nippon's Credit Risk side pocket NAV jumped from ₹0.1275 to ₹0.5036 on maturity day. Sellers kept only their sale price.
Time to money
About 6 months, 2 years, and 3 years 7 months for the 3 bonds.
I sold all my units at 0.19 in hope to recover whatever I can i lost 11500 rs
A AAA rated, listed, secured bond from a big company still failed: DHFL went from AAA to default in about 4 months in 2019.
A bond's price usually falls before its rating. Watch the price of what you own.
A missed payment made up in the grace period is not a default; one that is not made up is.
The debenture trustee acts for all holders: a notice within 3 days, 15 days to reply, a meeting within 30. Your vote matters.
After a default, the bond trades only in reported deals to a few distressed buyers, at prices driven by who is selling.
"100% asset cover" is a paper promise. Rescue plans to 2026 returned about 30% of what creditors were owed, often partly in new bonds.
Secured or unsecured, how you voted and how much you held decided recoveries more than the coupon did.
The law's clock is 330 days; real rescues took 2 to 3 years, and some far longer.
21 case files at the end show the full range, from full repayment to under 1%.
Important. This is general educational content, published as information only. We are not a SEBI registered investment adviser or research analyst, and nothing on this page is investment advice. Nothing here is a recommendation to buy, sell or hold any bond. All cases are historical; figures are from public filings, court orders, regulators and fund house disclosures, dated where used. Recovery figures are plan allocations unless the text says they were paid. The ₹1 lakh holding is an illustration of what the plan paid at that size.
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