The history of Ahmadnagar Sultanate began with the downfall of the Bahmani or Deccan Sultanate. As the Bahmani Kingdom went into decline, it split up into five Sultanates, one of them being the Nizamshahi Sultanate of Ahmednagar. Founded in1490 AD, the Nizamshahi was one of the strongest sultanates to rise from the declining Bahmans. It was established by Malik Ahmad Shah Bahri, who had served as the governor of Junnar under Bahman rule.
The Nizam Shahi lineage stemmed from one, Khalaf Hasan (He was a Hindu converted to Muslim). After the death of Mahmud Gawan (Prim minister of Bahmani Sultanate) the authority of the Bahmanid Sultan declined. Khalaf Hasan was able to exercise considerable autonomy in his area. His son, Malik Ahmad (A.D 1490-1510) declared his independence in Junnar some time in A.D1490. He founded a new city, Ahmadnagar and made it his capital. No coins of this dynasty are known before the reign of fourth ruler Murtuza Nizam Shah-I (A.D1565-1588)
When Shahji Bhonsle became de facto ruler of Ahmadnagar sultanate, than Mughal emperor, Shah Jahan-I decided to annex the kingdom once and for all, and in A.D1636, Shahji had to surrender to the Mughals, and the independent sultanate of Ahmadnagar came to an end.
During the early years, sultans of Ahmadnagar did not mint their own coins. They were probably over struck Bahmani and Gujarat Sultanate coins for circulation. The first ever coinage of Nizamshahi sultanate of Ahmadnagar was struck at Ahmednagar mint in the year 1565, during the reign of Murtaza Nizam Shah I.