Spandana Sphoorty board to consider raising funds via NCDs; stock up 2%

The rise in the Spandana Sphoorty stock price came after the company announced that its board of directors will meet on August 27 to consider raising funds via NCDS on private placement basis.

Spandana Sphoorty stock gains: Shares of Spandana Sphoorty surged as much as 1.86 per cent to hit an intraday high of Rs 631.30 per share on Friday, August 23, 2024. 

The rise in the Spandana Sphoorty stock price came after the company announced that its board of directors will meet on August 27 to consider raising funds via Non Convertible Debentures (NCDs) on a private placement basis. 

NCDs are financial instruments that companies use to raise long-term funds through public issues.

In an exchange filing, Spandana Sphoorty said, “It is hereby informed that a meeting of the Management Committee of the Board of Directors of Spandana Sphoorty Financial Limited is scheduled to be held on Tuesday, August 27, 2024, inter-alia to consider and approve, the issue and offer of Non-Convertible Debentures on private placement basis.   

Financial performance 

Spandana Sphoorty reported a major 53 per cent year-on-year (Y-o-Y) decline in its net profit for the June quarter (Q1FY25), at Rs 56 crore. The drop in profit was primarily attributed to increased credit costs. Sequentially, the net profit plummeted 57 per cent.

The company's asset quality also witnessed a downturn, influenced by seasonal factors, the general elections, and a severe heat wave. At the end of the quarter, the gross non-performing assets (GNPA) and net non-performing assets (NNPA) stood at 2.60 per cent and 0.53 per cent, respectively. In Q1FY24, these metrics were 1.63 per cent and 0.49 per cent. Spandana Sphoorty anticipates a return to normalcy in business operations by the second half of the fiscal year.

Management described Q1FY25 as a particularly challenging period due to the extensive 7-phase general elections, extreme heat across the country, and higher attrition rates in certain regions, which impacted portfolio quality.

Spandana Sphoorty Financial is a rural-focused non-banking financial company (NBFC) and microfinance lender (NBFC-MFI), operating with a diverse presence across India. The company provides income-generating loans through the joint liability group (JLG) model, primarily to women from low-income households in rural areas.

Established as an NGO in 1998 in Guntur, Spandana transitioned to an NBFC in 2004 and became an NBFC-MFI licenced by the Reserve Bank of India in 2015.

According to Bombay Stock Exchange (BSE), Spandana Sphoorty’s market capitalisation stands at Rs 4,420.56 crore.

At 10:43 AM, the company's shares were trading slightly up by 0.04% at Rs 620 per share, while the BSE Sensex remained stable at 81,064.33.