Global creditors of B2B e-commerce unicorn Udaan have filed insolvency proceedings against its Singapore-based offshore holding firm, Trustroot Internet Pvt. Ltd., after the company defaulted on $170 million in compulsorily convertible notes due on June 30, 2026. Following weeks of failed debt restructuring negotiations, the creditors, which included global banks and hedge funds such as Nomura, Tor Investment Management, and Arena Investors, filed a winding-up case with the Singapore High Court on July 1. Alvarez & Marsal, a well-known worldwide restructuring firm, has been appointed as liquidator in the proceedings. The talks broke down as lenders demanded a clearer and more substantial upfront payment from Udaan before agreeing to extend payback schedules, which the company was unable to meet.
The defaulted notes trace back to a roughly $340 million convertible financing package Udaan raised a few years ago. As part of a broader balance-sheet restructuring completed earlier in 2026, nearly $200 million of that facility was converted into equity. The other $170 million, with built-up interest, remained as debt, and it is this portion that has now matured without repayment, resulting in legal action. According to the original arrangement, if Udaan had already registered on public markets, the convertible notes would have converted into equity shares. The company has acquired authority to merge its multiple entities into a single structure, but its Singapore holding company, Trustroot, has not yet redomiciled in India, leaving it vulnerable to offshore creditor action.
“Global creditors have initiated insolvency proceedings against Udaan’s Singapore-based holding entity Trustroot Internet Pvt. Ltd. after it defaulted on $170 Mn in compulsorily convertible notes. Alvarez & Marsal has been appointed as liquidator.”~Inc42
Banks Pull Working Capital Lines as Valuation Collapses 69% From Peak:
Before the court filings, several major banking partners, including JP Morgan, HSBC, DBS, and Axis Bank, withdrew working capital lines from Udaan’s India unit. According to sources close to the company, all working capital lines were paid off and closed months ago and are no longer in use. Still, the optics of lenders pulling back at such a critical time have raised questions about the company’s financial stability.
The legal escalation sits against the backdrop of a dramatically weakened balance sheet. In FY25, Udaan’s revenue fell 20% year-on-year to Rs 4,561 crore, while losses narrowed 37% to Rs 1,055 crore. The company has racked up roughly Rs 13,000 crore in cumulative losses since it was founded in 2016. Udaan’s value has also suffered a series of setbacks. At its peak, the corporation was worth $3.2 billion. A fundraise in June 2025 reduced that by approximately 59% to $1.3 billion. A further round, which ended in May 2026, reduced the valuation to between $800 million and $1 billion, representing a more than 69% drop from its high. The slowdown in India’s B2B e-commerce industry has been a key factor, restricting Udaan’s order book and making it difficult to raise new finance at conditions acceptable to the company.
“Udaan’s Singapore holding entity Trustroot Internet defaults on $170 Mn convertible notes. Global lenders including Nomura, Tor Investment Management file winding up petition at Singapore High Court. Alvarez & Marsal named liquidator. #Udaan #Startup #Insolvency”~ET Now Swadesh
Udaan Says India Operations Unaffected, Goldman Sachs Equity Raise Underway:
Despite the severity of the offshore proceedings, Udaan has been firm that the insolvency action is ring-fenced to its Singapore holding company and has no bearing on its India operations. “The matters referenced relate to ongoing restructuring negotiations and offshore proceedings among offshore stakeholders at the offshore holding company level. These discussions have no bearing on our operating entities in India, where our teams employ our people and run the day-to-day business,” a company spokesperson said. Udaan and udaanCapital, the company’s fintech arm, continue to serve customers across trade commerce and supply chain financing.
Legal experts involved in the discussions have largely backed this characterisation, saying the dispute is essentially a shareholder-level matter confined to Singapore. One legal expert said unsecured creditors are using the court process to strengthen their negotiating position and seek recoveries comparable to what secured lenders and long-term investors including Lightspeed Venture Partners, M&G, and Moonstone would receive. Under Singapore’s insolvency framework, secured lenders and long-term investors rank ahead of unsecured creditors, making the court filing a tactical move as much as a financial one.
Meanwhile, Udaan is working with Goldman Sachs to raise between $150 million and $200 million in fresh equity, while also exploring a separate $40 million financing facility backed by pledged shares. It recently secured $50 million to $60 million from existing investors including M&G Prudential and Lightspeed Venture Partners. The company says this effort is ongoing and separate from the offshore restructuring dispute.
“Udaan’s Singapore holding company Trustroot Internet faces insolvency proceedings after defaulting on $170 mn convertible notes. Legal experts say proceedings are limited to offshore holding company and have no impact on India operations.”~Business Standard
IPO Ambitions Hang in the Balance as Creditor Pressure Mounts:
Founded in 2016 by former Flipkart executives Sujeet Kumar, Amod Malviya, and Vaibhav Gupta, Udaan has raised over $1.8 billion in combined equity and debt financing from investors including DST Global, Altimeter Capital, Tencent, GGV Capital, Hillhouse Investment, and Microsoft. It runs a B2B marketplace connecting manufacturers, wholesalers, retailers, and traders through its core platform, supported by logistics arm UdaanExpress and supply chain financing through udaanCapital. Last year, it deepened its retail tech presence through the acquisition of ShopKirana.
The insolvency proceedings now cast a serious shadow over Udaan’s long-held ambition to go public in India. The company was widely described as IPO-bound, and the original convertible note structure was designed with a public listing as the expected exit route. That listing has not materialised, leaving creditors in a position they did not expect to be in. Whether the Goldman Sachs equity raise can close fast enough and at a sufficient size to give creditors enough confidence to stand down from the Singapore proceedings will likely determine what happens next both for the company’s offshore restructuring and for its listing plans.
“Udaan faces insolvency proceedings in Singapore over $170 million bond default as global creditors appoint Alvarez & Marsal as liquidator after debt talks fail. Company says India operations unaffected.”~Moneycontrol
