Helion, Kedaara set for partial exits in Indian MFI's IPO

The offering will comprise new shares worth up to INR4 billion ($58 million), along with up to 13 million shares held by existing investors, according to the prospectus. Helion will sell 379,000 shares from its current holding of 1.5 million, while Kedaara will sell 192,000 of its 767,000 shares. Pricing terms have yet to be announced.

The offering will also see a partial exit by Kangchenjunga, a holding company with backers including Kedaara and Ontario Teachers’ Pension Plan (OTPP). Kanchenjunga currently holds 35 million shares in Spandana Sphoorty, a 59% stake. It will sell 8.8 million shares in the IPO.

Spandana Sphoorty is a registered MFI and non-banking finance company (NBFC) focused on India’s rural areas, where it targets women borrowers in low-income households. It plans to use most of the proceeds from the fresh issue to augment its capital base.

The company was launched in 2003 and registered as an NBFC in 2004. By 2010 it had become India’s second-largest MFI by assets under management (AUM). However, its business took a severe hit that year when Andhra Pradesh, its biggest market, passed heavy restrictions on lenders following a series of suicides in the state blamed on aggressive collections practices.

Helion invested in Spandana Sphoorty the following year, prior to the company entering a corporate debt restructuring agreement that prevented it raising additional capital. Under the restructuring plan, Spandana Sphoorty returned to profitability in 2014. Last year, having emerged from restructuring, the company raised a $270 million round comprising both debt and equity that was led by Kedaara, with participation by OTPP.

As of March 2018, Spandana Sphoorty had AUM of INR31.7 billion, with a loan book of INR38.6 billion, up from INR13 billion and INR20.6 billion the year before, respectively. Over the same period, revenue grew from INR3.6 billion to INR5.7 billion, while net profit rose from INR421 million to INR1.7 billion.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• South Asia
• IPO
• Financials
• Consumer
• India
• Exit
• Kedaara Capital
• Helion Ventures
• OTPP
• Financial Services
• NBFCs