Spandana Sphoorty raises $270 million fresh capital in a mix of equity and debt

Spandana Sphoorty, the micro finance institution based out of Andhra Pradesh, has raised $100 million equity capital from Kedaara Capital and Ontario Teachers’ Pension Plan, and ~$170 million of debt capital from IndusInd, Yes Bank and ICICI. The company will use the fresh capital to clear its existing debt with numerous financial institutions which were going bad. It has maneuvered its way out of the status of a defaulting institution and has repaid all its lenders with the recently raised capital after it was referred for Corporate Debt Restructuring (CDR) service by its lenders in 2011. The micro finance institution faced downhill when the Andhra Pradesh’s micro finance industry went into crisis.

The firm now operates in 13 states across the country, with almost 540 branches in various rural and semi-urban areas, and has over 2 million borrowers with a portfolio outstanding of INR1,325 crores. Padmaja Reddy, Founder and MD, said that “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”.