Spandana Sphoorty Financial Limited has informed the Exchange about Credit Rating
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CARE Ratings has downgraded Spandana Sphoorty Financial's long-term rating from CARE A (Negative) to CARE A- (Stable) covering ₹800 crore of bank facilities and ₹700 crore of non-convertible debentures. The short-term commercial paper rating was also cut from CARE A1 to CARE A2+ for ₹100 crore. The downgrade reflects a consolidated net loss of ₹1,035 crore in FY2025 versus a ₹501 crore profit in FY24, with gross stage 3 assets rising to 5.63% from 1.68% and loan write-offs of ₹1,618 crore. Assets under management fell 43% to ₹6,819 crore. On the positive side, capital adequacy remains strong at 37.1%, the company has healthy on-book liquidity of ₹1,324 crore, and a rights issue of up to ₹750 crore is planned, though the company has breached financial covenants on ₹1,236 crore of borrowings.
Shareholders should view this as a negative signal — the downgrade signals serious financial stress with large losses, rising bad loans, and covenant breaches that could make future borrowing costlier. However, the outlook revision from Negative to Stable and strong capital adequacy provide some cushion, and successful execution of the rights issue could stabilize the credit profile.