Lendingkart Finance Faces Widening Losses

Lendingkart Finance, the non-banking financial company arm of the fintech entity Lendingkart, has navigated a challenging fiscal year ending March 2026, reporting a substantial increase in its net deficit. The company's financial performance indicates a significant contraction, with its net loss escalating by 16% to ₹333.3 crore (approximately $40 million USD). This marks a considerable jump from the ₹288.3 crore deficit recorded in the preceding fiscal year, signaling intensified financial headwinds.

The primary driver behind this downturn appears to be a dramatic reduction in lending operations. Operating revenues experienced a sharp decline of 62%, falling to ₹327.3 crore from ₹866.9 crore year-over-year. This revenue contraction is directly linked to a precipitous drop in lending activity. Interest income, a core revenue stream, plummeted by 73% to ₹227 crore, while income derived from fees and commissions saw a similar collapse, decreasing by 76% to ₹107.6 crore. The scale of the slowdown is further illustrated by the drastic fall in monthly loan disbursals, which contracted from a peak of ₹340 crore to a mere ₹17 crore by August 2024.

This financial strain occurred against a backdrop of evolving regulatory directives within India's financial sector. The Reserve Bank of India's (RBI) tightening of regulations concerning unsecured lending, implemented in late 2023, imposed increased capital adequacy requirements on non-banking financial companies (NBFCs) operating in this segment. Such measures are designed to bolster financial stability but can create immediate operational and profitability challenges for lenders heavily exposed to unsecured portfolios.

In response to the reduced business volume and the prevailing economic climate, Lendingkart Finance implemented cost-saving measures. Total expenses were reduced by 40% to ₹773.1 crore. This included a 30% cut in staff costs, bringing them down to ₹116 crore. Furthermore, the company recalibrated its credit loss provisions, lowering them to ₹290.1 crore from ₹523.5 crore in the prior fiscal year, reflecting a more conservative approach to risk assessment in the current environment.

The period also saw significant leadership changes. Harshvardhan Lunia, the founder of Lendingkart, stepped down from his role as managing director in June 2025. This transition followed the acquisition by Fullerton Financial Holdings. Taking the helm as CEO was Prashant Joshi, a former executive from DBS. However, internal strategic disagreements emerged, culminating in November 2025 when Lunia filed a petition with the National Company Law Tribunal (NCLT) to contest decisions made by the new management team.

The financial performance of Lendingkart Finance underscores the sensitivity of NBFCs to regulatory shifts and macroeconomic conditions. The Indian fintech lending sector, while experiencing rapid growth in recent years, is subject to increasing scrutiny. Companies that rely heavily on unsecured lending are particularly vulnerable to policy changes aimed at mitigating systemic risk. The path forward for Lendingkart Finance will likely involve strategic adjustments to its lending portfolio and operational model to align with regulatory expectations and market realities.