Spandana Sphoorty lists 3.7% lower than issue price

Spandana Sphoorty

Mumbai: Shares of Spandana Sphoorty Financials Ltd made a tepid debut on stock markets on Monday. It was listed at ?824, down 3.74% from its issue price of ?856 per share. The initial public offering (IPO), open for subscription during 5-7 August, was subscribed 1.05 times and was aimed at raising around ?1,200 crore.

At 10.05 am, the stock was trading at ?843.70 on the BSE, down 1.52% from its issue price. The stock touched a high of ?849 and a low ?809.20.

The company proposed to utilise the net proceeds of the issue for augmenting the company’s capital base and for general corporate purposes.

Ahead of the IPO, Centrum Wealth Research had said, at higher end of the price band of ?856, issue is priced at 4.0 times/2.9 times its FY18/19 adjusted book value on post dilution equity basis. “Its successful exit from corporate debt restructuring (CDR) mechanism in March 2017 consistent profits along with a healthy asset book, builds confidence in the prospects,” Centrum Wealth Research said in a report on 2 August.

Spandana Sphoorty Financial Ltd is a rural-focused non-banking financial company microfinance lender (NBFC-MFI) with a geographically diversified presence in India. The company offers income generating loans under the joint liability group (JLG) model, predominantly to women from low-income households in the rural areas. It is the fourth largest NBFC-MFI in India in terms on assets under management (AUM) at ?4,437 crore as on 31 March, a growth of 40% backed by a healthy growth of 29% in disbursements.

Emkay Global Financial Services Ltd said unlike most of the other MFIs, SSFL faces limited concentration risk with its portfolio spread across 17 states in India. “To address the geographic concentration risk, SSFL management has maintained stringent exposure caps at the state, district and branch levels. With this adopted norm, the company’s operations are geographically well-diversified with no single state contributing more than 20% of AUM, no district contributing more than 1.8% of AUM and no branch contributing to more than 0.3% of AUM as of March 31, 2019,” Emkay said in a note on 2 August.

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