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Microlender Spandana gets $19.5 mn from Kedaara, Ontario Teachers’ Pension Plan

20 December, 2017

Microfinance institution Spandana Sphoorty Financial Ltd has raised Rs 125 crore ($19.5 million) from existing investors private equity firm Kedaara Capital and Canadian pension fund Ontario Teachers’ Pension Plan.

This is the second equity fundraise for the company after it emerged from corporate debt restructuring in March 2017, it said in a statement.

Kedaara and Ontario Teachers’ Pension Plan had invested Rs 514 crore in March 2017.

Around the same time, the micro-finance company had raised $170 million (about Rs 1,100 crore) in debt capital from IndusInd Bank, Yes Bank and ICICI Bank.

The fundraise in March had helped the company repay its outstanding dues and exit the corporate debt restructuring process it was referred to by its lenders in 2011 as a result of a micro-finance credit crisis in Andhra Pradesh.

The current fund infusion has increased the company’s net worth to Rs 750 crore. The firm is planning to go public in the second quarter of the next financial year and is hiring merchant bankers, it said.

“The equity raise is an indication of Kedaara’s belief in microfinance and more particularly in Spandana. The company’s portfolio grew by 100% in the last nine months from Rs 1,300 crore to Rs 2,600 crore,” said Padmaja Reddy, founder and managing director of Spandana Sphoorty Financial.

Spandana has operations across 14 states through 620 branches with a manpower of 3,500. It has been serving 12 lakh borrowers in 202 districts and 48,000 villages. The company is planning to grow its portfolio to Rs 3,200 crore by March 2018.

Incorporated in 2003, Spandana is a non-banking financial company that provides small-ticket unsecured loans with an average tenure of one-two years.

The company posted a turnover of Rs 421.8 crore and a net profit of Rs 52.9 crore in the year through 31 March 2017.

The total gross loan portfolio of Spandana was Rs 2,244 crore as on 30 September 2017, according to a report by industry body Microfinance Institutions Network. It disbursed loans of about Rs 980 crore in the July-September quarter.

In November, Centrum Group agreed to acquire FirstRand Bank’s India microfinance business.

In October, IndusInd Bank had agreed to buy microlender Bharat Financial Inclusion Ltd in an all-stock deal.

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Microlender Spandana gets $19.5 mn from Kedaara, Ontario Teachers’ Pension Plan

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