Spandana Sphoorty jumps after brokerage initiates coverage

Spandana Sphoorty Financial rose 3.40% to Rs 931.75 after a domestic brokerage firm initiated coverage on the stock with a 'Buy' rating with a target price of Rs 1,200 each.

According to reports, the brokerage cited that Spandana Sphoorty Financial is tapping into under-served rural opportunity, where the market is attractive due to under-penetration. Rural market provides better market opportunity with lower competition. The firm has high degree of client engagement and robust risk management. The company has lowest operating expense ratio among peers, it added.

The stock debuted on the bourses on 19 August 2019, at Rs 824, a discount of 3.74% to the initial public offer (IPO) price of Rs 856. On that day, it settled at Rs 848.40, a discount of 0.89% over IPO price. The stock has risen 9.8% since its listing.

The company's IPO was open between 5th and 7th August 2019. The price band for the issue was fixed at Rs 853 to Rs 856 per share. The issued was subscribed 1.05 times.

The net proceeds of the fresh issue were proposed to be utilized for augmenting capital base and general corporate purposes. The net proceeds of the fresh issue were proposed to be deployed in FY2020. Further, there will be the benefits of listing of the equity shares on the stock exchanges, enhancement of the brand name and creation of a public market for equity shares in India.

Meanwhile, the S&P BSE Sensex was down 233.48 points or 0.61% to 37,873.39.

On the BSE, 1197 shares were traded in the counter so far compared with average daily volumes of 2667 shares in the past one quarter. The stock hit a high of Rs 935 and a low of Rs 906.05 so far during the day.

The stock hit a record high of Rs 995 on 25 Sept 2019. The stock hit a record low of Rs 690 on 19 Aug 2019.

On a consolidated basis, Spandana Sphoorty reported profit after tax (PAT) of Rs 311.90 crore on income from operations of Rs 1043.10 crore in the financial year ended on 31 March 2019.

Spandana Sphoorty is a fourth largest non-banking financial company - micro finance institution (NBFC-MFI) and the sixth largest amongst NBFC-MFIs and SFBs (small finance banks) in India in terms of AUM with a geographically diversified presence in India. It offers income generation loans under the joint liability group model, predominantly to women from low-income households in rural Areas.

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