Waning investor confidence in India’s troubled shadow lenders is sapping demand for corporate debt, Bloomberg News reported. Companies sold 1.2 trillion rupees ($17.3 billion) of bonds so far in the April-June period, down 57% from the previous quarter and the weakest since the year-ago period, despite the decline in borrowing costs, according to data complied by Bloomberg. Liquidity risk in the nation’s credit markets roared back this month after non-bank financier Dewan Housing Finance Corp.

Jet Airways share price sprang a surprise today after days of thrashing after the ailing airline found itself stuck in muddy waters of debt trap invoking lenders to approach insolvency court to recover their dues, Business Today reported. Jet Airways share, which hit a fresh 52-week low of 27 in trade today rebounded 133% amid short covering to hit an intra day high of 77.35 on BSE. The sudden rise in Jet Airways stock comes ahead of an order to be passed by National Company Law Tribunal (NCLT) on insolvency plea filed by country's largest lender SBI.

Indian mortgage lender Dewan Housing Finance Corp Ltd (DHFL) said it had only been able to make a 40 percent payment on unsecured commercial papers due on Tuesday, but vowed to pay the remaining 2.25 billion rupees ($32.49 million) in the coming days, Reuters reported. India’s shadow banking sector has been thrown into disarray after a series of defaults at large lender Infrastructure Leasing and Financial Services last year triggered fears about contagion in the financial sector.

Banks have just about a couple of weeks to decide the fate of more than 150 borrowers, which include sugarmaker Bajaj Hindusthan, energy companies RattanIndia Power and Suzlon and other infrastructure and road builders as the 30-day review period for these loans ends on July 7, The Economic Times reported.

India's National Company Law Tribunal is pushing for the corporate insolvency resolution process for Jet Airways to be fast-tracked, citing the national importance of the matter, FlightGlobal reported. An order from the Mumbai bench of the court appointed Ashish Chhawchharia from Grant Thornton as the interim resolution professional (IRP) and declared a moratorium on any action be creditors to recover assets or lodge legal action against Jet. That moratorium will run until the completion of the insolvency process, the court approves a resolution plan, or a liquidation is ordered.

Realty developer Rustomjee Group has emerged as the sole bidder for Ariisto Developers, one of the first Mumbai based builders to be admitted by the National Company Law Tribunal (NCLT) for undertaking insolvency proceedings, said persons with direct knowledge of the development, the Economic Times reported. Total claims of lenders and other stakeholders, including lenders and operational creditors, stand at ₹2,500 crore.

India’s bankruptcy court, the National Company Law Tribunal (NCLT), on Thursday accepted an insolvency petition against Jet Airways Ltd filed by its creditors as they attempt to recover some of their dues, Reuters reported. The insolvency process will allow lenders to sell the company as a whole or in parts, laying out a fixed timeline for a resolution around its future. Jet Airways, once India’s biggest private carrier, stopped flying in April after running out of cash, leaving thousands without jobs and pushing up air fares across the country.

Paragon Entertainment said on Thursday it did not have enough cash to run its operations or pay its dues and the company has decided to appoint administrators as soon as possible, while its top boss resigned, Reuters reported. The company, which has designed visitor attractions and experiences such as The Rolling Stones Exhibitionism at the Saatchi Gallery, said Chief Executive Damien Latham has resigned with immediate effect.

There’s yet another sign that India’s push to quickly expand its corporate debt market is faltering, as borrowers turn more to banks already struggling with one of the world’s worst bad debt ratios, Bloomberg News reported. India’s bond market remains small compared with other major economies, frustrating policy makers who champion it as a way of diffusing credit risks that have stacked up at banks.

State Bank of India (SBI), the lead banker to Jet Airways, on Tuesday filed an insolvency plea against the crisis-hit airline under Section 7 of the Insolvency and Bankruptcy Code at the National Company Law Tribunal (NCLT), Mumbai, Business Standard reported. The tribunal will hear the plea on June 19. Ashish Chhawchharia of advisory firm Grant Thornton has been selected interim resolution professional by the SBI and one of the first tasks before him would be to gather details of the airline’s assets, aircraft, and employees on the rolls.