India: Spandana Sphoorty gets $63m financing from Bank of Baroda, IndusInd Bank

Photo: Reuters

Hyderabad-based microfinance institution Spandana Sphoorty Financial Ltd, has raised Rs 400 crore ($63 million) from IndusInd Bank and Bank of Baroda through the issue of Pass Through Certificates.

A Pass Through Certificate is a certificate issued to the investor in lieu of pledged asset.

So far, Spandana has securitised Rs 810 crore ($127.5 million) portfolio to various banks and financial institutions. In November, Spandana had securitised Rs.100 crore portfolio to Bandhan Bank through Pass Through Certificate. Prior to that, it had securitised a Rs 90-crore portfolio at the rate of Rs 30 crore each to Kotak Mahindra Bank, Mahindra Finance and Hinduja Leyland Finance.

Most recently in December, Spandana raised another Rs 125 crore ($19.5 million) in equity from existing investors Kedaara Capital and Ontario Teachers’ Pension Plan (OTPP).

According to an official statement, Spandana has so far raised a total of Rs 2,100 crore in the April to December 2017 period including PTCs, term loans and capital market instruments from 23 lenders.

“The portfolio increased from 1,300 Cr to 2,600 Cr in the current financial year and we will cross Rs. 3200 Crore by the end of this fiscal,” said Padmaja Reddy, Managing Director of Spandana, said.

Spandana, which had been referred to corporate debt restructuring by its lenders in 2011 after the Andhra Pradesh microfinance crisis, was raising funds to clear its existing debt with 37 financial institutions which had previously gone bad. In March 2017, the company successfully exited CDR and claims to have 1.2 million borrowers across 14 states with a workforce of 3,500.

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