Spandana Sphoorty Financial Ltd Share Price – NSE /  BSE

Finance, Small Cap

The agency has also affirmed the company’s short-term rating at 'CARE A1+’.

CARE Ratings stated that the reaffirmation of the rating of the commercial paper (CP), non-convertible debentures (NCD) and bank term loans of Spandana Sphoorty Financial (SSFL) is based on the company’s healthy growth in loan portfolio of Rs 11,973 crore (on a consolidated basis) as on 31 March 2024, healthy liquidity profile, comfortable capitalisation position with low gearing levels as compared to peers, diversified resource profile with increasing share of bank borrowings owing to stabilization and strengthening of management team and geographically diversified AUM as on 30 June 2024.

However, these rating strengths are partially offset by the ongoing stress in the Micro-Finance industry (MFI) due to increasing borrower indebtedness and the weakening of the Joint Liability Group (JLG) model, debt-waiver campaigns, continued high attrition rate at field staff level and heat wave effect, impacting the company’s loan book growth, asset quality and profitability metrics.

Owing to rise in delinquencies in Q1 FY25 and consequent uptick in the credit costs and operating costs, profitability of SSFL has been impacted with decline in annualized return on total assets (RoTA) to 1.72% vis-à-vis 4.47% in FY24.

Asset quality after improving significantly in FY24, has deteriorated in Q1 FY5, with gross NPA (GNPA) rising from 1.68% as on 31 March 2024 to 2.89% as on 30 June 2024.

Going forward, CARE Ratings anticipates a moderation in loan book growth considering the ongoing MFI stress. Additionally, rising credit costs are expected to exert further pressure on profitability, company’s ability to maintain its financial flexibility in the current environment will remain key rating monitorable.

Spandana Sphoorty Financial is a registered with the RBI as a non-banking financial company - micro finance institution (NBFC-MFI). 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 raring, cottage industries & micro entrepreneurial ventures like tailoring, grocery stores amongst others, education and healthcare.

The scrip fell 2.91% to currently trade at Rs 570.40 on the BSE.

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Spandana Sphoorty Financial has received credit rating from CARE Ratings for various instruments of the company as under:

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Spandana Sphoorty Financial has approved the issuance of up-to 5,000 Secured, Senior, Redeemable, Transferable, Listed, Rated Non-Convertible Debentures having face value of Rs 1,00,000 each at premium of Rs 690.40 per debenture, on private placement basis. The date of allotment is 08 October 2024.

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Spandana Sphoorty Financial will hold a meeting of the Board of Directors of the Company on 3 October 2024.

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