Zafar Khan, eldest son of Bahman Shah, ascended the throne after the death of his father on 11 February, 1358 and assumed the title of Muhammad Shah. His position was greatly strengthened by the recognition of the Abbasid Caliph which permitted him the use of khutba or right to be mentioned in the Friday prayer and to coin money.
But he was soon confronted with his powerful neighbours, the rulers of Vijayanagar and Telingana. Both of them demanded the restoration of the territories forcibly occupied during the reign of his father. Bahmani forces under Umar Bahadur Khan defeated the army of the Telingana ruler Kapaya Nayak which was led by his son Vinayaka Deva. The latter was put to death.
The populace of Andhra greatly resented this act and rose in revolt which compelled the Sultan to beat a hasty retreat. Kapaya Nayak took up arms against the Sultan and also sued for help from the Vijayanagar ruler and the Delhi Emperor, Firuz Tughluq.
Having failed to get any encouraging reply he had no alternative but to come to terms with the Bahmani Sultan. He had to cede the town of Golkonda and to pay a huge indemnity. Kapaya also presented a turquoise throne which henceforth became the royal throne of the Bahmanis. However, the stout resistance offered by Kapaya Nayak discouraged the Sultan who gave up his earlier idea to conquer whole of Telingana.