India: Spandana Sphoorty Raises $270mn in Fresh Funding

Apr 2017
India, April, 03 2017 - "This is an amazing turn-around, and we are excited to have Kedaara Capital as our partner in our next phase of growth."

Andhra Pradesh based micro finance institution Spandana Sphoorty has raised over $100mn in equity capital from a Kedaara Capital led consortium including Ontario Teachers' Pension Plan, and almost $170 million of debt capital from IndusInd Bank, Yes Bank and ICICI Bank on March 31 in order to clear its existing debts with 37 financial institutions which had previously gone bad.

Spandana, which had been referred to Corporate Debt Restructuring (CDR) by its lenders in 2011 after the Andhra Pradesh microfinance crisis, has managed to wriggle out of its status as a defaulting institution and has repaid all its lenders, the entire restructured loan after the fresh round of fundraising.

CDR was the means devised by the Reserve Bank of India to ensure timely and transparent restructuring of corporate debts of viable entities facing funding problems outside the purview of Debt Recovery Tribunal or any other legal proceedings for the benefit of all stakeholders.

The regulator's aim was to get the restructuring programme solved with minimum loss to lenders as well as to other stakeholders.

Spandana now operates in 13 states across India, with almost 540 branches in various rural and semi-urban areas, and has over 2 million borrowers with a portfolio outstanding of Rs 1,325 crores.

The company also leverages its vast distribution network in rural and semi-urban areas to improve its clients' quality of living by offering other products such as solar lanterns, mobile handsets, consumer durables, etc.

"This is an amazing turn-around, and we are excited to have Kedaara Capital as our partner in our next phase of growth. This equity infusion from the Kedaara led consortium, along with new debt support from the banks, has helped us to clear all of our debt repayments, exit CDR, and position us to once again become one of the leading MFIs in India," said Padmaja Reddy, Founder & Managing Director, Spandana Sphoorty.


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