Latest news with #SpandanaSphoortyFinancial
Time of India
17 hours ago
- Business
- Time of India
Spandana Sphoorty to raise Rs 400 crore via rights issue for FY26 plans
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Microfinance company Spandana Sphoorty Financial is planning to raise up to Rs 400 crore from existing shareholders through rights issue of shares. The company board approved the plan board will meet again on Friday to fix the price of the issue and other related matters such as related payment mechanism, rights entitlement ratio, the record date and timing of the issue, Spandana said after Tuesday's board meeting in regulatory filings to the stock rights issue is a part of the microfinance company's plan to raise up to Rs 750 crore in equity in FY26.A board committee was earlier formed to oversee the capital raising exercise. Interim chief executive Ashish Damani had earlier said that the promoter Kedaara Capital is expected to participate in the rights Sphoorty suffered a Rs 1035 crore annual net loss in FY25 while its gross bad loan ratio jumped to 5.63% of the total portfolio. It faced another jolt when chief executive Shalabh Saxena abruptly stepped down in April amid suspicion of unreported frauds at the branch level and cash balance company however denied all the allegations.
Business Standard
02-07-2025
- Business
- Business Standard
Spandana Sphoorty declines after Crisil Ratings downgrades ratings to 'BBB+'
Spandana Sphoorty Financial (SSFL) fell 1.17% to Rs 277.95 after the company said that Crisil Ratings has downgraded its rating on its long-term bank facilities to 'Crisil BBB+/Stable' from 'Crisil A-/Stable'. Crisil Ratings stated that the rating action is driven by higher than anticipated moderation in profitability on account of continued asset quality pressure resulting in elevated credit costs. Apart from asset quality challenges, the business risk profile has also been constrained by slower than expected revival in business. As on 31 March 2025, the gross and net non-performing assets (GNPA and NNPA, respectively) increased to 5.6% (24.9% including write-offs) and 1.2%, from 1.5% and 0.3% as on 31 March 2024. This surge in asset quality metrics was a factor of pervading ground level challenges like over-indebtedness and high attrition of field staff since Q1 2025 and challenges in states like Karnataka. This led the company to incur incremental credit costs of Rs 603 crore for Q4 2025, resulting in an annual credit cost (as a % of average managed assets) of 17% for fiscal 2025 significantly higher than 2.1% for fiscal 2024. Therefore, reported loss for Q4 2025 was Rs 434 crore as against a loss of Rs 440 crore for the previous quarter of fiscal 2025 and a profit of Rs 129 crore for the corresponding quarter of the previous fiscal. As these challenges are likely to continue over majority of Q1 2026 as well, the companys asset quality and profitability are expected to remain vulnerable over the near to medium term and start improving materially only by the latter half of fiscal 2026. The pace and magnitude at which asset quality and overall profitability restore to normalcy, will remain a key monitorable and a rating sensitivity factor. In the interim, the companys plan of raising up to Rs 750 crore of equity capital - announced in January 2025 is expected to partly offset the impact of accumulating losses on the networth. Any material change in the quantum of equity proposed to be raised and/or a significant delay in the timing of this infusion will be a key monitorable. The overall rating continues to reflect the companys established track record in the microfinance sector along with regional diversity in asset base and healthy capitalisation. Tier I and overall capital adequacy ratios (CAR) were comfortable at 36% and gearing was low at 2.1 times on March 31, 2025. These strengths, however, are partially offset by moderation is asset quality and profitability due to susceptibility to inherent risks of the microfinance sector and average resource profile. Spandana Sphoorty Financial (SSFL), along with its subsidiaries, is engaged in lending, providing small-value unsecured loans to low-income customers in semi-urban and rural areas. The tenure of these loans is generally 1-2 years. While SSFL extends microfinance loans, its subsidiaries extend other services such as loans against property, business loans and personal loans.
Economic Times
18-06-2025
- Business
- Economic Times
Spandana Sphoorty Financial plans Rs 750-crore capital raise with Kedaara Capital's equity infusion
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel 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 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 company didn't respond to ET's queries until the publication of this 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 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 share price plunged 65% in the past one year to Rs 267 from Rs 795, as investors lost interest in 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 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.
Business Standard
12-06-2025
- Business
- Business Standard
CARE downgrades credit ratings of Spandana Sphoorty Financial
Spandana Sphoorty Financial announced that CARE Ratings has downgraded rating has downgraded rating to CARE A- (Stable), for existing instruments of the Company. Long term rating (Rs 800 crore) - CARE A- (Stable); downgraded from CARE A NegativeNon convertible debentures (Rs 500 crore) - CARE A- (Stable); downgraded from CARE A NegativeNon convertible debentures (Rs 200 crore) - CARE A- (Stable); downgraded from CARE A NegativeCommercial paper (Rs 100 crore) - CARE A2+; downgraded from CARE A1 Powered by Capital Market - Live News
Business Standard
11-06-2025
- Business
- Business Standard
India Ratings downgrades ratings of Spandana Sphoorty to 'A-' with 'negative' outlook
Spandana Sphoorty Financial said that India Ratings and Research has downgraded its rating on the company's non-convertible debentures (NCDs) and bank loans' ratings to 'IND A-' from 'IND A' with a 'negative' outlook. India Ratings and Research stated that the downgrade and negative outlook reflect the continued stress on Spandanas asset quality during FY25, leading to pressure on its consolidated profitability, largely on account of elevated credit costs and operating expenses. Furthermore, the infusion of the confidence equity capital, as guided by the management during Q4 FY25, is yet to be completed. India Ratings notes that, as per the managements estimates, the capital infusion will be completed by Q2 FY26. Spandana is one of the companies that have been most impacted by the microfinance crisis, and the rating action reflects the significant losses reported by the company during FY25, higher than the India Ratings estimates for the period, post the declaration of H1 FY25 financial performance and in line with the agencys revised estimates. The agency expects the operating and financial performance to remain under pressure in the near term. The company witnessed a significant uptick in portfolio delinquencies in FY25, largely on account of increasing levels of borrower indebtedness, high field staff attrition, and operational challenges due to the transition to weekly collections mode from a monthly mode in select geographies (the transition has been paused at present due to headwinds in the sector), leading to weakening of the asset quality. The internal challenges were further exacerbated by external factors such as the impact of general elections in Q1 FY25, political movements in certain geographies, and adverse weather conditions. The ratings are supported by Spandanas geographically diversified loan portfolio and a healthy capitalisation profile, supported by the demonstrated track record of regular equity infusions. However, Spandanas overall cost of borrowings remains higher than that of its peers. The company also witnessed an uptick in the marginal cost of borrowing between Q1 FY25 and Q4 FY25. Thus, Spandanas ability to further diversify its funding profile and raise debt at improved rates compared to its peers would be a key rating monitorable. The ratings remain vulnerable to the risks associated with the microfinance business, including its modest borrower profile. This, however, is mitigated to some extent by the geographical diversification in Spandanas portfolio as well as the revised regulatory guidelines for the microfinance segment in FY22, which enable risk-based pricing for the industry. Spandana Sphoorty Financial is primarily engaged in the business of microfinance, providing small-value unsecured loans to low-income customers in semi-urban and rural areas. The scrip fell 1.32% to currently trade at Rs 280.05 on the BSE.
