Spandana Sphoorty Financial Limited has informed the Exchange about Credit Rating
SPANDANA · price
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Awaiting price reaction for this filing.
India Ratings & Research has downgraded Spandana Sphoorty's rating on its non-convertible debentures (INR 10.05 billion) and bank loans (INR 15 billion) from IND A-/Negative to IND BBB+/Negative, a two-notch cut. The downgrade reflects continued stress on asset quality, with gross stage 3 assets rising to 5.49% as of June 2025, and heavy credit costs that pushed the company to a consolidated loss of INR 3,602 million in 1QFY26. Operational disruptions from the microfinance crisis, the Karnataka microfinance bill, and the transition to weekly collections weighed on collections efficiency (around 89%). The company is also in breach of financial covenants on some NCDs (INR 206 million outstanding) and term loans (INR 1,381 million), though it has received partial waivers. Leadership remains in flux after the exit of MD & CEO Shalabh Saxena, with CFO Ashish Damani appointed as interim CEO.
Negative for shareholders: the rating cut raises the cost of future borrowings, signals deeper financial stress, and a Negative Outlook suggests further downgrades are possible if asset quality and profitability do not improve soon. The stock is likely to face pressure given the weak earnings, covenant breaches, and uncertain leadership transition.