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Rating agency ICRA places Spandana Sphoorty Financial's bond under watch

CEO, CFO exit may impact operations in near term


Abhijit Lele  |  Mumbai 

I-T lens on deposits

Rating agency today placed Spandana Sphoorty Financial Ltd’s (SSFL) debentures and bank lines under watch with developing implications following sudden resignation by its chief executive Padmaja Reddy and other senior level exits.

had attributed key person risk with respect to Reddy, considering her deep involvement in the management of the day-to-day operations of the micro-finance lender. The chief financial officer (CFO) exited in October 2021 and the chief strategy officer (CSO) exited in November 2021.

While the frequent churn in the senior management team was a concern, the recent exits, including that of the MD & CEO, is expected to have some impact on the normal operations in the near term, said in a statement tonight.

The micro lender’s board has re-constituted a management committee under the chairmanship of K R Kamath, former CMD, Punjab National Bank and a non-executive director on the board of the company. The panel is empowered to provide a strategic direction to the business operations in the interim till a new leadership team (CEO and CFO) takes over responsibility.

The management committee is handling the governance in the interim period and is in the process of appointing both a CEO and a CFO. Yet the uncertainties which the company faces in the near term till a new leadership team takes control is monitorable.

The rating “A-” for debentures and bank lines considers SSFL’s geographically diversified portfolio mix and its comfortable capitalisation levels.

SSFL was catering to more than 2.52 million active borrowers through a network of 986 branches across 282 districts in 18 states (including one Union Territory). Its assets under management (AUM) stood at Rs 6,958 crore as on June 30, 2021.

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First Published: Wed, November 10 2021. 22:14 IST