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Time of India
18-06-2025
- Business
- Time of India
Spandana Sphoorty Financial plans Rs 750-crore capital raise with Kedaara Capital's equity infusion
Kolkata: Microfinance lender Spandana Sphoorty Financial is exploring possibilities of equity infusion from principal shareholder Kedaara Capital through a rights issue of shares within the proposed Rs 750-crore capital raise . Equity infusion from the promoter may boost the sagging confidence of other investors in the ailing microfinance company. Fusion Finance , for instance, saw more than a 50% jump in market capitalisation after its principal shareholder, Warburg Pincus, led a Rs 800-crore infusion via a rights issue. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Top Internet Deals for Your Home – 2025 Edition Search7 Learn More Undo Spandana suffered a Rs 1035 crore annual net loss in FY25 while its gross bad loan ratio jumped to 5.63% of the total portfolio, reflecting the overall stress in the microfinance sector . The company has formed a capital raising committee which is exploring the rights issue option, a person familiar with the matter said. The company didn't respond to ET's queries until the publication of this report. Live Events However, interim chief executive Ashish Damani told analysts in a post-earning call last month that the rights issue would be done with the promoter participation. "What we presently understand is, you know, they have confirmed their participation," he said. Kedaara Capital holds 48.13% in Spandana through funds named Kedaara Capital Fund III LLP and Kangchenjunga Ltd. However, questions have been raised by a few analysts on its participation since it has a scheduled exit by September 2026. It has already received a one-year extension. "Our equity raise plans are pretty much on track. We have received shareholder approval for capital raise during March for up to Rs 750 crore. The board committee has been formed to oversee this capital raise, including a possible rights issue in Q2 FY '26," Damani said during the call. Spandana's share price plunged 65% in the past one year to Rs 267 from Rs 795, as investors lost interest in it. Fusion Finance, another NBFC-MFI under immense stress, saw its share price falling to a one-year low of Rs 124 but it recovered to Rs 195.95 at the end of Wednesday after equity infusion through the rights issue, people tracking the sector said. Its one-year high was Rs 483. The entire microfinance ecosystem has been reeling under stress over the past one year due to high customer overleveraging, collapsing of the joint liability model and rising staff attrition. The sector was sitting on a heap of Rs 61000 crore of gross non-performing assets (including the written-off loans) at the end of March.
Time of India
18-06-2025
- Business
- Time of India
I-Sec upgrades Fusion Finance to Buy, target price revised to Rs 225
ICICI Securities has upgraded Fusion Finance to Buy from Reduce with a revised target price of Rs 225 (earlier Rs 160). The current market price of Fusion Finance is Rs 197.1. Fusion Finance, incorporated in 1994, is a Small Cap company with a market cap of Rs 2585.68 crore, operating in the NBFC sector. Fusion Finance's key products/revenue segments include Interest, Income From Financial Services, Income From Sale Of Share & Securities and Fees & Commission Income for the year ending 31-Mar-2024. Financials For the quarter ended 31-03-2025, the company has reported a Standalone Total Income of Rs 475.99 crore, down -1.35 % from last quarter Total Income of Rs 482.51 crore and down -29.50 % from last year same quarter Total Income of Rs 675.14 crore. The company has reported net profit after tax of Rs -164.56 crore in the latest quarter. The company?s top management includes Sachdev, Dharashree Vishwanathan, Kaul, Vaish, Ostawal, Dan Vander Weele. Company has S R Batliboi & Associates LLP as its auditors. As on 31-03-2025, the company has a total of 10 crore shares outstanding. Investment Rationale ICICI Securities notes that subdued AUM growth in H1FY26, rising borrowing cost and sticky operating cost (C-I ratio at ~70% in Q4FY25) would keep PPoP muted in the near-term; however, they believe stressed asset formation has peaked out and credit cost?s improving trajectory shall continue ahead. Early recognition of stress and accelerated provisions (>95% PCR on Stage-3 assets with NNPL at 0.30%, as on Mar?25), capital infusion via rights (proforma CRAR at ~30%+), X bucket CE increasing to 98.4% in Mar?25 (from 97.1% in Q3FY25) and gradual normalisation of disbursements over FY26 would enable recovery in earnings over FY26E?27E. Given inexpensive valuation (PBV at 0.9x FY27E BVPS) and encouraging signs of new initiatives yielding positive outcomes, the brokerage upgrades to BUY (Reduce earlier) with a revised target price of Rs 225 (earlier Rs 160), valuing the stock at 1.2x Sep-26E BVPS (earlier 0.6x Sep-25E BVPS). Promoter/FII Holdings Promoters held 57.71 per cent stake in the company as of 31-Mar-2025, while FIIs owned 1.69 per cent, DIIs 16.91 per cent. ETMarkets WhatsApp channel )
Economic Times
18-06-2025
- Business
- Economic Times
I-Sec upgrades Fusion Finance to Buy, target price revised to Rs 225
Fusion Finance's key products/revenue segments include Interest, Income From Financial Services, Income From Sale Of Share & Securities and Fees & Commission Income for the year ending 31-Mar-2024. Financials For the quarter ended 31-03-2025, the company has reported a Standalone Total Income of Rs 475.99 crore, down -1.35 % from last quarter Total Income of Rs 482.51 crore and down -29.50 % from last year same quarter Total Income of Rs 675.14 crore. The company has reported net profit after tax of Rs -164.56 crore in the latest quarter. The company?s top management includes Sachdev, Dharashree Vishwanathan, Kaul, Vaish, Ostawal, Dan Vander Weele. Company has S R Batliboi & Associates LLP as its auditors. As on 31-03-2025, the company has a total of 10 crore shares outstanding. Live Events Investment Rationale ICICI Securities notes that subdued AUM growth in H1FY26, rising borrowing cost and sticky operating cost (C-I ratio at ~70% in Q4FY25) would keep PPoP muted in the near-term; however, they believe stressed asset formation has peaked out and credit cost?s improving trajectory shall continue ahead. Early recognition of stress and accelerated provisions (>95% PCR on Stage-3 assets with NNPL at 0.30%, as on Mar?25), capital infusion via rights (proforma CRAR at ~30%+), X bucket CE increasing to 98.4% in Mar?25 (from 97.1% in Q3FY25) and gradual normalisation of disbursements over FY26 would enable recovery in earnings over FY26E?27E. Given inexpensive valuation (PBV at 0.9x FY27E BVPS) and encouraging signs of new initiatives yielding positive outcomes, the brokerage upgrades to BUY (Reduce earlier) with a revised target price of Rs 225 (earlier Rs 160), valuing the stock at 1.2x Sep-26E BVPS (earlier 0.6x Sep-25E BVPS). Promoter/FII Holdings Promoters held 57.71 per cent stake in the company as of 31-Mar-2025, while FIIs owned 1.69 per cent, DIIs 16.91 per cent. (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel ICICI Securities has upgraded Fusion Finance to Buy from Reduce with a revised target price of Rs 225 (earlier Rs 160). The current market price of Fusion Finance is Rs 197.1. Fusion Finance, incorporated in 1994, is a Small Cap company with a market cap of Rs 2585.68 crore, operating in the NBFC Finance's key products/revenue segments include Interest, Income From Financial Services, Income From Sale Of Share & Securities and Fees & Commission Income for the year ending the quarter ended 31-03-2025, the company has reported a Standalone Total Income of Rs 475.99 crore, down -1.35 % from last quarter Total Income of Rs 482.51 crore and down -29.50 % from last year same quarter Total Income of Rs 675.14 crore. The company has reported net profit after tax of Rs -164.56 crore in the latest company?s top management includes Sachdev, Dharashree Vishwanathan, Kaul, Vaish, Ostawal, Dan Vander Weele. Company has S R Batliboi & Associates LLP as its auditors. As on 31-03-2025, the company has a total of 10 crore shares Securities notes that subdued AUM growth in H1FY26, rising borrowing cost and sticky operating cost (C-I ratio at ~70% in Q4FY25) would keep PPoP muted in the near-term; however, they believe stressed asset formation has peaked out and credit cost?s improving trajectory shall continue ahead. Early recognition of stress and accelerated provisions (>95% PCR on Stage-3 assets with NNPL at 0.30%, as on Mar?25), capital infusion via rights (proforma CRAR at ~30%+), X bucket CE increasing to 98.4% in Mar?25 (from 97.1% in Q3FY25) and gradual normalisation of disbursements over FY26 would enable recovery in earnings over FY26E?27E. Given inexpensive valuation (PBV at 0.9x FY27E BVPS) and encouraging signs of new initiatives yielding positive outcomes, the brokerage upgrades to BUY (Reduce earlier) with a revised target price of Rs 225 (earlier Rs 160), valuing the stock at 1.2x Sep-26E BVPS (earlier 0.6x Sep-25E BVPS).Promoters held 57.71 per cent stake in the company as of 31-Mar-2025, while FIIs owned 1.69 per cent, DIIs 16.91 per cent. (Disclaimer: Recommendations given in this section or any reports attached herein are authored by an external party. Views expressed are that of the respective authors/entities. These do not represent the views of Economic Times (ET). ET does not guarantee, vouch for, endorse any of its contents and hereby disclaims all warranties, express or implied, relating to the same. Please consult your financial adviser and seek independent advice.
Time of India
25-05-2025
- Business
- Time of India
Microfinance stress takes toll on FY25 profits
Representative image CHENNAI: Stress in the sector has left microfinance institutions bleeding. Listed MFIs have either reported a loss or a substantial decrease in their profits in the March quarter. This comes on the back of multiple factors including deterioration in asset quality, rising credit costs, borrower overleveraging and rising borrower overlaps that impacted the performance of microfinance companies during FY25. Muthoot Microfin posted a loss of Rs 401 crore in Q4 FY25 while Fusion Finance ((formerly Fusion Micro Finance) reported a loss of Rs 164 crore during the same period. Microfinance lender CreditAccess Grameen's net profit dropped by 88% to Rs 47 crore in Q4 FY25 against Rs 397 crore in the year-ago period. Satin Creditcare Network's standalone PAT in Q4 FY25 declined by 67% to Rs 41 crore from Rs 125 crore during the year-ago quarter. Mahendra Patil, founder and managing partner, MP Financial Advisory Services LLP said, the gross non-performing asset (GNPA) ratio for the sector surged to 16% at the end of FY25, up from 8.8% a year earlier, indicating a significant rise in defaults. However, the microfinance sector is projected to grow by 12-15% in FY26 under a conservative scenario, returning to FY24 levels, Patil added. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Time of India
24-05-2025
- Business
- Time of India
Microfinance firm Fusion suffers 4th consecutive quarterly loss
Fusion Finance reported a net loss of Rs 165 crore for Q4 FY25, marking its fourth consecutive quarterly loss due to severe asset quality stress. Increased provisions for bad loans, totaling Rs 255 crore, significantly impacted profitability. The company is seeking extensions from lenders after breaching financial covenants on borrowings of Rs 4,763 crore. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Kolkata: Microfinance company Fusion Finance reported its fourth quarterly loss in a row due to the ongoing severe asset quality stress that the sector is suffering lender's net loss stood at Rs 165 crore for the fourth quarter of FY25, as compared with a net profit of Rs 133 crore in the year-ago period, owing to higher provisions to cover bad loans. It set aside Rs 255 crore during the quarter as compared with Rs 119 crore operating profit for the quarter under review stood 69% lower at Rs 90 crore against Rs 291 crore in the year-ago interest margin was at 8.57% as compared with 11.59% over the same period. Its interest income at Rs 4,449 crore was 22% lower year-on-year, in line with squeezed business had reported a net loss of Rs 36 crore in the first quarter, Rs 305 crore in the second quarter and Rs 719 crore in the third quarter of FY25. Provision was the highest during the third quarter at Rs 572 Fusion's annual net loss stood at Rs 1,225 crore as compared with Rs 505 crore net profit in the preceding company breached various financial covenants in respect of borrowings amounting to Rs 4,763 crore as of March 31, 2025. Therefore, these borrowings become repayable on demand. The company has obtained extension from its lenders for these breaches for borrowings of Rs 4,080 crore. It is in discussion with the remaining lenders to obtain similar extensions, the company management said in a regulatory filing to the stock company holds cash and cash equivalents and liquid assets aggregating Rs 798 crore."The company remains committed to improving recovery efforts at the field level and is confident of achieving better outcomes. Any subsequent recoveries will be recognised as income and credited to the statement of profit and loss in the period of recovery," managing director Devesh Sachdev lender's gross non-performing assets ratio stood at 7.92% at the end of March against 2.89% a year back. Gross NPA was at 12.6% at the end of December 2024. The ratio came down sequentially due to accelerated write-off of bad loans to the tune of Rs 405 crore during the assets under management dipped 22% year-on-year to Rs 8,980 crore at the end of FY25 from Rs 11,476 crore as it slowed disbursal to prevent further worsening of asset capital adequacy ratio stood at 22.4%, well above the regulatory stipulation.
