After closing mega financing deals earlier this year, micro-finance institution Spandana Sphoorty Financial Ltd today said it has completed its fourth securitisation deal with Kolkata-based Bandhan Bank.
“Spandana has securitised Rs.100 crore portfolio to Bandhan Bank through Pass Through Certificate,” the company said in a statement.
Prior to this transaction, Spandana has securitised a Rs 90-crore portfolio at the rate of Rs 30 crore each to Kotak Mahindra Bank, Mahindra Finance and Hinduja Leyland Finance through Pass Through Certificates.
A Pass Through Certificate is a certificate issued to the investor in lieu of pledged asset.
In March, Spandana Sphoorty had raised $270 million through a mix of equity and debt funding. The round was led by private equity major Kedaara Capital and also saw participation from Ontario Teachers’ Pension Plan which invested over $100 million for a stake while $170 million was raised from IndusInd Bank, Yes Bank and ICICI Bank in the form of debt.
The first tranche of Rs 514 crore from Kedaara was received in March 2017, while the private equity investor will be putting an additional Rs 125 crore in a second tranche this month.
It was recently reported that the financial services firm had raised $62 million from Birla Mutual Fund in the form of non-convertible debentures.
Spandana, which had been referred to corporate debt restructuring (CDR) by its lenders in 2011 after the Andhra Pradesh microfinance crisis, was raising funds to clear its existing debts with 37 financial institutions which had previously gone bad.
According to a company statement, it has raised Rs 1,800 crore since Mar 2017 from 21 lenders. Its portfolio has grown from Rs 1,300 crore to Rs.2,400 crore in the past six months after its exit from CDR, it said.
Padmaja Reddy, Managing Director of Spandana, said the latest funds will be used for on-lending to microfinance borrowers. According to Reddy, portfolio securitisation helps it effectively deploy its capital as the company does not have to allocate capital towards portfolio securitised.
After the second round of fundraise, the company will have a net worth of Rs 750 crore. It claims to have made Rs 105 crore profit before tax in the first half of the year, and boasts a collection efficiency of 99.98 per cent as on October 30, 2017.
Microfinance institutions have seen great interest from investors. Earlier this year, Odisha-based Annapurna Microfinance raised a new funding round of Rs 61 crore (9.5 million) led by Bamboo Capital Partners. Arohan Financial Services Pvt Ltd, a part of Aavishkaar-Intellecap Group, raised a total of Rs 155.5 crores ($24 million) in May to fund its expansion plans.