India, Aug. 2 -- Kinara Capital is facing a liquidity crunch after some of its lenders appropriated fixed deposits and issued loan recall notices, prompting credit rating agency ICRA to downgrade the company's bonds and loans.

ICRA said that the severe deterioration in the liquidity profile faced by Kinara Capital following the loan set-off against its bank balances and appropriation of lien-marked fixed deposits by some lenders and the requests from other lenders for early redemptions of their loans.

The credit rating agency highlighted that this action from a few lenders would direct the other lenders to also trigger an early redemption, hurting its liquidity profile in the near term.

Inc42 has reached out to Kinara Capital for comme...