Spandana Sphoorty Financial Limited, a microfinance institution (MFI) in India backed by Mumbai-based Kedaara Capital, held a three-day initial public offering (IPO) this month. It met its goal of raising INR 12 billion (USD 167 million) to augment its capital base and fund general operations.
Spandana shares debuted at INR 825 (USD 11.44) per share, a discount to their issue price of INR 856 (USD 11.94). At the end of the bidding, the IPO was subscribed by a factor of 1.05. According to Centrum Wealth Research, Spandana’s “successful exit from corporate debt restructuring…in March 2017, consistent profits, along with a healthy asset book, builds confidence in the [firm’s] prospects.”
Spandana, which is based in the state of Andhra Pradesh, is a rural-focused non-banking financial company-MFI. It provides income-generating loans predominantly to women in low-income households, as well interim loans for customers struggling to meet short-term liquidity requirements.
The company was founded by Padmaja Reddy in 1998. As of 2018, it reported a gross loan portfolio of INR 31.7 billion (USD 442 million) and approximately 1.59 million active borrowers. Spandana has 694 offices across 15 states in India. The organization does not accept deposits.
Kedaara Capital is a private equity firm that focuses on investing in India. It is a “global partner” of Clayton, Dubilier and Rice, a private equity firm based in the US city of New York. Kedaara typically invests USD 25 million to USD 75 million in each portfolio firm, while investing upwards of USD 200 million in select situations. Data indicating the size of the organization remain confidential.
By Anna Gravois, Research Associate
Sources and Additional Resources
Bloomberg/Quint Spandana pre-IPO article
https://www.bloombergquint.com/ipos/spandana-sphoorty-ipo-all-you-need-to-know
Bloomberg/Quint Spandana post-IPO article
https://www.bloombergquint.com/markets/spandana-sphoorty-financial-falls-56-below-ipo-price-on-stock-market-debut
Spandana homepage
http://www.spandanaindia.com
MIX profile on Spandana
https://www.themix.org/mixmarket/profiles/spandana
Kedaara homepage
http://www.kedaara.com
MicroCapital on the microfinance downturn and other topics related to Andhra Pradesh
https://www.microcapital.org/?s=pradesh
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