Cox and Kings saw its stock price plunge on the Bombay Stock Exchange after it defaulted on agreed debt repayments.
It paid off just $7.3 million of the $29 million owed, leading to credit rating downgrade and surprised analysts.
"Due to cash flow mismatch and a situation exacerbated by rating downgrade, the company proposes to meet its financial obligations through a combination of internal accruals and monetisation of assets," it said in a stock market filing.
The travel company’s stock has sunk 78% since the beginning of the year, although it was thought to have sufficient cash reserves to pay off its debt requirements.
Last year it sold off European education tour business subsidiary Holiday Break to Midlothian Capital Partners and said the funds would go toward servicing its debt.
