Assets Under Management AUM

Spandana Sphoorty to raise Rs 4,000 cr in bonds in FY23, plans to double AUM



Private equity firm Kedaara Capital, a microfinance institution backed by Spandana Sphoorty Financial Ltd (SSFL), plans to raise about Rs 4,000 crore through bonds in FY23 to support business growth . It has set a target to increase assets under management (AUM) to Rs 15,000 crore by FY25 from Rs 6,581 crore in March 2022.

It resumed operations (disbursements) in Q4FY22 after facing disruptions in Q3FY22 due to the abrupt resignation of former Managing Director Padmaja Reddy.

The board has approved a proposal to raise an amount not exceeding Rs 4,000 crore through non-convertible debentures (NCD). They could be issued in one or more tranches via a private placement route, the non-banking finance company (NBFC) said in the filing with the BSE.

Regarding growth, Spandana has identified seven additional states including Gujarat, Rajasthan, Haryana, Uttar Pradesh, Bihar and West Bengal with favorable measures for rapid scaling up of the microfinance portfolio. It is seeking additional AUM of Rs 6,000 to 7,000 crore from these states and continues to grow organically in existing states, its new Managing Director and Managing Director Shalabh Saxena said.

Accelerating growth would lead to increased investment and spending. Spandana Sphoorty’s cost/income ratio (CI ratio) increased to 32.9% for FY22, compared to 21.9% for FY21. It is expected to increase further to 43.7% in FY23 due to increased investment in business growth and moderate to 35.7% in FY25. of its network are expected to increase to 1,500 in FY25, from 1,010 at the end of March 2022 and 1,010 in March 2020.

On the issue of adjusting the evolving business model, company executives said on an analyst call that it does not want to make a knee-jerk reaction and has no intention of disrupting the existing model. Everything new would be done in a calibrated way.

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