Pune-based two-wheeler finance startup Bike Bazaar stopped all new loan disbursements starting December 2025 due to a sharp deterioration in its loan book, according to inc42.com. Credit ratings agency ICRA downgraded Bike Bazaar to BBB status in June 2026, marking it as a high-risk borrower after more than a third of its portfolio became non-performing or was sold off as distressed debt.
The downgrade followed Moody’s affiliate ICRA’s June 25, 2026 report that downgraded multiple pass-through certificate issuances linked to Bike Bazaar’s securitised loan pools. ICRA cited the weakening performance of these underlying loan pools and the deteriorating financial position of Bike Bazaar, which services the loans. The startup is currently in talks with a strategic investor to revive its business, but the market conditions make a turnaround challenging. Bike Bazaar has not responded to requests for comment from inc42.com.
Bike Bazaar’s credit issues have also affected its securitisation process, where loans originated by the startup are pooled and traded to other investors as assets. The downgrades highlight growing risks in the two-wheeler finance sector, which has seen rising non-performing assets amid tightening credit conditions. The startup’s troubles underscore the challenges faced by niche lending platforms in maintaining portfolio quality and investor confidence in a stressed market environment.
ICRA’s downgrade of Bike Bazaar’s loan-backed securities on June 25, 2026, reflects the severity of the credit deterioration. The company’s ongoing discussions with a strategic investor aim to address the crisis, but no immediate resolution has been announced, leaving the startup’s future uncertain.