Spandana Sphoorty Financial has announced the approval of a significant debt fundraising initiative through non-convertible debentures (NCDs). The Management Committee of the Board of Directors approved the issuance of up to 15,000 listed, rated, senior, secured, redeemable, taxable NCDs with a total value of ₹150.00 crore, including a greenshoe option of 7,500 additional NCDs worth ₹75.00 crore.

Issue Structure and Timeline

The NCD issuance comes with clearly defined terms and a structured timeline for implementation. The debentures are scheduled for allotment on December 17, 2025, with a maturity period of 24 months extending until December 17, 2027.

Payment Schedule and Terms

The NCDs feature a structured payment mechanism designed to provide regular income to investors. The interest payments follow a monthly schedule, while principal repayments are structured quarterly to ensure systematic debt servicing.

Investment Features

The NCDs are structured as listed, rated, senior, secured, redeemable, and taxable instruments, providing multiple layers of investor protection and transparency. The secured nature of the debentures offers additional safety for bondholders, while the listing on BSE Limited ensures liquidity and market accessibility.

The private placement basis of the issuance allows for targeted investor engagement, while the greenshoe option provides flexibility to raise additional capital up to ₹75.00 crore based on market demand. The 24-month tenure offers a medium-term investment opportunity with systematic payment schedules for both interest and principal components.

Spandana Sphoorty Financial Limited , a prominent microfinance institution, has reported full utilization of Rs. 195.02 crore from its Rs. 400 crore rights issue. This development comes as the company shows signs of recovery amidst ongoing challenges in the microfinance sector.

Utilization of Funds

According to the monitoring agency report by CARE Ratings Limited:

• The company has fully utilized Rs. 190.00 crore towards its primary objective of augmenting the capital base and meeting funding requirements for business activities.
• An additional Rs. 5.02 crore, initially earmarked for general corporate purposes, has also been directed towards the primary objective.

Financial Performance and Recovery Signs

While Spandana Sphoorty has faced significant challenges in recent quarters, including a decline in scale and deterioration in asset quality, the company is showing promising signs of recovery:

• Disbursement volumes have shown an increasing trend, indicating renewed borrower engagement.
• Current bucket collection efficiency has improved consistently across key states.
• Loans originated in the current fiscal year are exhibiting strong collection efficiency.

Ongoing Challenges

Despite these positive developments, the company continues to face some hurdles:

• Spandana Sphoorty remains in breach of some financial covenants, affecting Rs. 432.00 crore of outstanding borrowings.
• Out of this amount, the company has received waivers for Rs. 294.00 crore of debt.

Rights Issue Details

The rights issue, totaling Rs. 400.00 crore, has been partially subscribed:

• The company has received Rs. 199.35 crore, representing approximately 50% of the total issue size.
• The balance of Rs. 200.00 crore is yet to be received.

Looking Ahead

As Spandana Sphoorty navigates through this challenging period, the full utilization of the rights issue proceeds for its core business activities signals a focused approach towards recovery and growth. The improvements in disbursement volumes and collection efficiency are encouraging signs for the company's future performance.

Investors and stakeholders will likely keep a close eye on how the company addresses its ongoing financial covenant breaches and leverages the infused capital to strengthen its position in the competitive microfinance sector.