New Delhi: Bad loans probably ballooned last quarter at Altico Capital India Ltd., according to people familiar with the matter, a lender that’s seen as a barometer in India’s evolving shadow bank crisis.

Soured debt was provisionally estimated at close to 40 per cent of total credit end-December, up from 23.8 per cent in September, the people said, asking not to be identified as the details are private. The final number will likely be shared with Altico’s creditors this week.

The surge in bad loans at real estate-focused Altico — which reported a 1.8 per cent ratio as recently as June — shows the extent of the financial squeeze that triggered a spate of shadow bank defaults in India over the past 17 months. The crisis has contributed to the nation’s slowest economic growth since 2009.

Creditors are seeking external bids to compete with a shareholder-sponsored restructuring plan. Three potential bidders have already pulled out, leaving only Cerberus Capital Management LP and SSG Capital Management, which have both submitted indicative bids.

The deadline for binding bids was recently extended by a week to January 24, the people said.