Kedaara-backed Spandana Sphoorty in talks with i-banks to launch IPO

THE PROPOSED IPO COULD SEE THE MICROFINANCE COMPANY RAISE AS MUCH AS ₹1,000 CRORE

MUMBAI: Kedaara Capital-backed micro-finance institution Spandana Sphoorty Financial Ltd has initiated talks with investment banks for an initial public offering (IPO), said three people aware of the development.

Spandana, set up in 2003, is engaged in the business of providing small-ticket unsecured loans to women from low-income households in rural and urban areas. It provides business loans, income-generation loans, loans against jewellery.

The proposed IPO could see the micro-finance company raise as much as ₹1,000 crore, said one of the three people cited above, requesting anonymity.

“Spandana has initiated talks with investment banks for its IPO, which they are looking to do in the current calendar year. They are expected to soon appoint banks for this purpose. The company could raise around ₹1,000 crore, which is likely to be majorly a primary fund-raise for funding the lending institution’s growth,” he said.

Emails sent last week to Padmaja Reddy, managing director at Spandana and Manish Kejriwal and Sunish Sharma, managing partners at Kedaara Capital did not elicit any response.

The IPO will mark a major milestone in the turnaround story of Spandana, which had entered corporate debt restructuring (CDR) in 2010 following the Andhra Pradesh microfinance crisis.

Last year, Spandana raised $270 million in funding, facilitating its exit from the CDR after seven years, reported.

Around $100 million came in the form of equity capital from a Kedaara Capital-led consortium including Ontario Teachers’ Pension Plan, and the rest in the form of debt capital from IndusInd Bank Ltd, Yes Bank Ltd and ICICI Bank Ltd. Kedaara, a homegrown private equity fund, picked up a 55% stake in the micro-lender. Spandana was one of five micro-finance firms referred to the CDR cell after the crisis the micro-finance industry faced in Andhra Pradesh.