Latest news with #SpandanaSphoorty
Mint
18-07-2025
- Business
- Mint
Spandana Sphoorty Rights Issue: Check issue price, record date, entitlement ratio and other details
Spandana Sphoorty Financial on Friday, July 18, said its board has approved the offer and issuance of partly paid-up equity shares of the company for an amount not exceeding ₹ 400 crore, by way of a rights issue. Rights Issue Dates: The Spandana Sphoorty rights issue will open on Friday, August 1, 2025, and close on Monday, August 11, 2025. The last date for on-market renunciation of rights entitlements is Wednesday, August 6, 2025. The last date for off-market renunciation is also August 11, 2025, ensuring that eligible shareholders have sufficient time to act on their entitlements. Total Rights Issue Shares: The rights issue will comprise 17,391,304 partly paid-up equity shares with a face value of ₹ 10 each. This would aggregate to a total issue size of up to ₹ 400 crore. Rights Issue Price: The price of each Rights Equity Share is fixed at ₹ 230, including a premium of ₹ 220 and a face value of ₹ 10. Rights Issue Payment Schedule: The payment for the rights issue shares will be made in two tranches: ₹ 115 per share on application ( ₹ 5 towards face value and ₹ 110 towards premium). ₹ 115 per share on one or more subsequent calls, as determined by the Board or Capital Raising Committee, to be completed on or before March 31, 2027, unless extended. Rights Issue Record Date: The record date for determining shareholders eligible to participate in the rights issue is Thursday, July 24, 2025. Rights Entitlement Ratio: Eligible shareholders will receive 10 rights equity shares for every 41 fully paid-up equity shares held as of the record date. Outstanding Equity Shares: Assuming full subscription, the total outstanding equity shares of the company after the rights issue will increase to 88,696,448 from 71,305,144 equity shares. ISIN for Rights Entitlement: The International Securities Identification Number (ISIN) for the rights entitlement is INE572J20011. Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
Mint
05-06-2025
- Business
- Mint
Can this microfinance lender lead the industry's turnaround in FY26?
The microfinance industry remains a tough sector to navigate. While it offers higher interest spreads, rising defaults during economic slowdown make it a tricky business to be in. This vulnerability resurfaced once again as the post-pandemic credit boom lost momentum in FY25. Initially driven by low interest rates, credit growth began slowing as borrowing costs rose and economic activity weakened. This shift strained borrower repayment ability, increased asset quality stress, and severely hit profitability across the sector. To limit further damage, many lenders opted to write off bad loans and reset their books. The intent was to enter FY26 with a cleaner slate, as the industry looks ahead to a potential recovery. Also Read: Russia-Ukraine war escalation: Impact on the Indian stock market Spandana Sphoorty took a similar approach. In FY25, it wrote off loans worth ₹1,618 crore—a move that dented profits. However, with most of the clean-up now behind it, it is positioning itself for a turnaround in FY26. So, where does Spandana stand after this reset? AUM contracts Let's start with assets under management (AUM), which declined sharply by 43% year-on-year to ₹6,819 crore in FY25. Disbursements also fell 48% to ₹5,605 crore, as Spandana adopted a cautious lending stance. This is evident from the AUM per branch, which fell from ₹7.3 crore in March 2024 to ₹3.8 crore in March 2025. This conservative approach directly contributed to the drop in the overall loan book. The management said FY25 was one of the most challenging periods for the microfinance industry. Multiple headwinds—including higher borrower leverage, weakening of the Joint Liability Group model, deteriorating borrower discipline, and sociopolitical interference—forced lenders to tighten credit norms and proceed with greater caution. The impact of this is also visible in customer numbers, which fell from 3.3 million in March 2024 to about 2.5 million by March 2025. However, now the company remains confident of reviving growth in FY26. It plans to grow its AUM book by 20%, driven by a similar increase in disbursements, most of which is expected in the second half of FY26. The company now plans to lend to quality borrowers—who currently account for 51% of its borrower base as per internet lending regulations—to support the future growth. Asset quality worsens Not just AUM, but asset quality stress also increased—a trend often seen in times of stress in the microfinance industry. Spandana impairment cost—unrecoverable loans—rose from ₹259 crore (in FY24) to ₹1986 crore in FY25. Also Read: Analysts and investors have soured on Asian Paints. Can it prove them wrong? Gross non-performing assets (GNPA) increased by 4.1 percentage points to 5.6%, while net NPAs rose by 0.9 percentage points to 1.2%. On the positive side, Spandana continues to maintain a healthy provision coverage ratio of 80%. The management attributed much of the stress to elevated field-level attrition, which hurt operational efficiency and contributed to rising delinquencies. To strengthen collections, the company has now deployed around 700 loan officers, who will focus on recovery from 90+ day old loans and the write-off pool. Early recovery signs Despite a challenging year, Spandana is starting to see early signs of recovery. Gross collection efficiency declined from 94% in Q1 to 90.9% in Q4FY25. But the company highlighted an improving trend in net recovery from bad assets. Net collection efficiency for loans overdue by more than 90 days (called X-Bucket) improved from 96.4% (Nov-24) to 98.6% in March 2025. Interestingly, branches with a weekly repayment model reported even higher collection efficiency of 99.3% in March. As a result, Spandana now plans to scale up its weekly-model branches, which are showing better collection performance. The company believes improving collections to about 99% helps support profitability going forward. Recovery from 90+ day past-due accounts has also picked up meaningfully, rising from ₹11 crore in Q1FY25 to ₹52 crore in Q4 FY25. In total, Spandana recovered over ₹90 crore in the last fiscal. In FY26, the company expects a further recovery, aided by a dedicated team and the early arrival of the monsoon, which typically supports rural cash flows. Strict credit filters to address borrower leverage Lender overlap—the proportion of borrowers taking loans from three or more MFIs, including Spandana, has also shown signs of improvement. Lender overlap declined from 23% (Feb-25) to 20.3% in April 2025, indicating some relief on the leverage front. Also Read: These five private banks in India have the lowest NPAs. Should you invest? To tackle the issue further, Spandana has decided on stricter credit filters. It will now cease lending to borrowers with overdue loans exceeding 60 days with any regulated entity, where the loan amount exceeds ₹3,000. Additionally, it will also avoid lending to borrowers who have availed a loan in the past 12 months, effective June 2025. Profitability severely hit While green shoots are visible, elevated stress levels kept credit costs high, which impacted profitability in FY25. The company's total income declined by just 3% to ₹2,424 crore, indicating a relatively stable topline. Net interest income also fell by 5% to ₹1,228, as the net interest margin contracted by 1.3 percentage points to 12.8%. However, the bigger concern was on the operating front. Pre-provision operating profit dropped sharply by 35% to ₹608 crore, as the cost-to-income ratio rose to 60.6% from 43.5% in FY24. This situation was further aggravated by impairment, which rose from ₹259 crore (FY24) to ₹1,986 crore (including write-offs of ₹1,618) in FY25. As a result, the company moved from a profit of ₹501 crore in FY24 to a net loss of ₹1,035 crore in FY25. Needless to say, the return ratios—return on assets and return on equity—turned negative. Capital position stays strong Spandana's net worth declined from ₹3,707 crore to ₹2,633 crore due to the heavy loss in FY25. However, its capital adequacy remains well above regulatory norms, with a capital-to-risk-weighted assets ratio (CRAR) of 37.1% as of March 2025, well above the RBI's mandated 15%. Liquidity healthy; rights issue planned The company's liquidity position continues to offer comfort. It reported a cash balance of ₹2,030 crore as of March 2025, enough to meet short- and medium-term requirements. Additionally, shareholders approved a ₹750 crore capital raise in March 2025, and the company plans to raise further capital in Q2 FY26 via a rights issue, with promoter participation, which signals confidence in a potential turnaround. Valuation factors in stress Spandana's share price has declined 64% in the last one year, currently trading at ₹262. This correction has largely priced in many of the concerns, with the stock now valued at a price-to-book (P/B) multiple of 0.7x, significantly below its 10-year median P/B of 1.5x. Going forward, a sustained recovery in key metrics—particularly in asset quality, disbursement growth, and collection efficiency—will be crucial to re-rating, with most of this expected to unfold from the second half of FY26. Madhvendra has over seven years of experience in equity markets and has cleared the NISM-Series-XV: Research Analyst Certification Examination. He specialises in writing detailed research articles on listed Indian companies, sectoral trends, and macroeconomic developments. Disclosure: The writer does hold the stocks discussed in this article. The purpose of this article is only to share interesting charts, data points, and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educational purposes only.
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Business Standard
02-06-2025
- Business
- Business Standard
Why did Spandana Sphoorty share price declined 10% in trade today?
Spandana Sphoorty Financial shares lost 9.6 per cent in trade on Monday, June 2, 2025, logging a day's low at ₹262.35 per share on BSE. The selling pressure came after the company posted its Q4 results. In the past one year, Spandana Sphoorty shares have gained 63 per cent as compared to Sensex's rise of around 7 per cent. At 12:50 PM, Spandana Sphoorty share price was down 6.7 per cent at ₹270.65 per share on the BSE. In comparison, the BSE Sensex was down 0.10 per cent at 81,369.78. The market capitalisation of the company stood at ₹1,929.87 crore. The 52-week high of the stock was at ₹803.6 per share and the 52-week low of the stock was at ₹214.7 per share. Spandana Sphoorty Q4 results 2025 The company reported its fourth quarter (Q4FY25) results on Friday, May 30, 2025, which showed a net loss of ₹434.3 crore as compared to a profit of ₹128.64 crore a year ago. The revenue from operations of the company stood at ₹414.79 crore as compared to ₹669.09 crore a year ago, down 38 per cent. In FY25, asset under management (AUM) stood at ₹6,819 crore year-on-year (Y-o-Y), down 43 per cent, as against ₹11,973 crore a year ago. The company's disbursement stood at ₹5,605 crore; down 48 per cent Y-o-Y, as compared to ₹10,688 crore. Its standalone gross net profit asset (GNPA) and net non-performing asset (NNPA) stood at 4.85 per cent and 0.96 per cent respectively. Spandana Sphoorty's net interest income (NII) stood at ₹1,228 crore; down 5 per cent Y-o-Y, as compared to ₹1,289 crore. About Spandana Sphoorty Spandana Sphoorty Financial Ltd. is a rural-focused non-banking financial company and a microfinance lender (NBFC-MFI) with a geographically diversified presence in India. The company offers income-generating loans under the joint liability group (JLG) model, predominantly to women from low-income households in rural areas. Spandana was started as an NGO in 1998 in Guntur, which later converted to an NBFC in 2004. In 2015, it became an NBFCMFI, licensed by the Reserve Bank of India.
Business Standard
21-04-2025
- Business
- Business Standard
Spandana Sphoorty soars 19% on heavy volumes; zooms 50% in 7 days
Shares of Spandana Sphoorty Financial (SSFL) moved higher by 19 per cent to ₹322 on the BSE in Monday's intraday trade amid heavy volumes. In the past seven trading days, the stock price of the microfinance institution (MFI) has zoomed 50 per cent on hopes of improvement in business outlook. It had hit a 52-week low of ₹271.70 on April 7, 2025. At 10:59 AM, Spandana Sphoorty shares were trading 17 per cent higher at ₹317.05, as compared to 1 per cent rise in the BSE Sensex. The average trading volume on the counter jumped 1.5 times with a combined 1.8 million equity shares changing hands on the NSE and BSE. That said, despite the 50 per cent recovery from its 52-week low price, SSFL stock is still down 66 per cent from its 52-week high level of ₹935.15, which it touched on April 30, 2024. The stock had hit a record high of ₹1,400 on November 8, 2019. Recovery in microfinance stocks According to analysts at Kotak Institutional Equities, there was a significant deterioration in the asset quality for players who had microfinance in their portfolio over the past year. "However, we are now starting to see a scenario where incremental data on forward flows, collections and Special Mention Accounts (SMA) book is showing an improvement," the brokerage said. While there do exist a few risks to the recovery timeline (because of potential credit tightening due to 3-lender cap, for example), however, one can take comfort from the fact that the worst part of the cycle is behind and lenders' appetite to resume disbursements is improving. "This can make the asset quality recovery theme a relatively simpler theme to play out over the next year," the brokerage firm said in a sector update report. CARE Ratings reaffirms Spandana Sphoorty ratings On April 4, 2025, SSFL informed the stock exchanges that CARE Ratings has reduced limits of Long Term Bank Facilities and reaffirmed the ratings for various instruments of the company. Spandana Sphoorty's capitalisation profile remains comfortable with a capital adequacy ratio (CAR) of 36.0 per cent and gearing of 2.5 times as on December 31, 2024. Further, SSFL has sought approval from its board of directors and shareholders to raise confidence capital of up to ₹750 crore. However, the company is yet to finalise the details and timeline, CARE Ratings said in its rationale. "While its growth is expected to remain moderate in the near term, the proposed capital raise will help in improving the loss absorbing cushion for the entity. Further, the company continues to maintain a healthy liquidity and has a diversified funding profile, although it has seen slight moderation with reduction in share of bank funding to 49.4 per cent in December 2024 from 55.7 per cent in March 2024," it added. CARE Ratings expects the headwinds to continue and its profitability and asset quality to remain muted in the near term. Going forward, CARE Ratings anticipates loan book growth to remain moderate considering the ongoing MFI stress. Additionally, with rising credit costs expected to exert further pressure on profitability in the near team, the company's ability to maintain its financial flexibility in the current environment will remain key rating monitorable. Motilal Oswal Financial Services on Spandana Sphoorty According to Motilal Oswal Financial Services, SSPL is expected to see some more stress in its asset quality over the next couple of quarters; however, the management has highlighted early signs of recovery in December 2024 and January 2025, with normalisation expected by Q1/Q2FY26. The brokerage firm maintained its 'Buy' rating on the stock with a share target price of ₹395 (based on 1x Sep'26E BV) after Q3FY25 results. Key downside risks are sustained asset quality stress in the loan book spilling into FY26 as well, and the inability to retain talent in the senior/middle management teams, similar to high attrition seen at the field officer and branch manager levels, analysts said. About Spandana Sphoorty Financial The company is engaged in undertaking microfinance loans business in India in a joint liability group (JLG) and loan against property (LAP) lending model. The company provides micro loans with a tenure of 1-2 years to women borrowers from low-income households for income generation activities like agriculture, handlooms & handicrafts, cattle rearing, cottage industries & micro entrepreneurial ventures like tailoring, grocery stores amongst others, education and healthcare. The company has two subsidiaries, Caspian Financial Services Limited (CFSL) and Criss Financial Limited (CFL). As on December 31, 2024, the company operates in 19 states and 1 union territory with consolidated asset under management (AUM) of ₹8,936 crore.
