The shadow lender's shares have plunged nearly 20 per cent since then, but closed up 7.5% on Monday.

Mortgage lender Dewan Housing Finance Corp Ltd (DHFL) said it has paid the interest and principal on certain debt instruments that was due on Monday and completed the stake sale in Aadhar Housing Finance Ltd to an entity backed by Blackstone Group LP.

DHFL paid Rs 10.02 crore in interest on four non-convertible debentures (NCD) and principal of Rs 35 crore on one of them, it said in a filing on Monday.

The payment comes after two major credit ratings agencies - ICRA, an affiliate of Moody's, and Standard & Poor's local unit Crisil - last week categorised the company's commercial paper at default levels for missing bond payments.

The shadow lender's shares have plunged nearly 20 per cent since then, but closed up 7.5 per cent on Monday.

India's shadow banking sector has been thrown into disarray after a series of defaults at large lender Infrastructure Leasing and Financial Services (IL&FS) last year triggered fears about a contagion in the financial sector.