Spandana Sphoorty raises USD 270 mn from Kedaara Capital and leading Indian banks

April 4, 2017 Posted by Press Releases


3rd April 2017, Hyderabad, India – Spandana Sphoorty Financial Limited (“Spandana”) has raised ~INR 650 crores (over USD 100 million) in equity capital from a Kedaara Capital led consortium including Ontario Teachers’ Pension Plan, and ~INR 1,100 crores (~USD 170 million) of debt capital from IndusInd Bank, Yes Bank and ICICI Bank on March 31, 2017. Spandana, one of the microfinance institutions (“MFIs”) that was severely impacted by the Andhra Pradesh (“AP”) microfinance crisis in late-2010, was referred to Corporate Debt Restructuring (“CDR”) by its lenders in 2011. However, under the strong leadership of its founder Ms. Padmaja Reddy, Spandana has turned around its operations, leading to Kedaara’s investment, and, uniquely amongst its peers, a successful exit from CDR. All 37 of the company’s lenders supported Spandana through the CDR process, and have now had their outstanding restructured loans repaid in full. Unitus Capital was the exclusive financial advisor to Spandana for the equity investment.

Spandana was founded by Ms. Reddy in 1998, with the aim to provide unsecured income generation loans, micro-enterprise loans, agricultural family loans, and loans-against-gold to its underserved low-income clients in rural and semi-urban areas of India. Prior to the AP crisis, Spandana was the second largest microfinance institution in India, with a portfolio of INR 4,500 crores (USD 790 million) across 11 states, with AP contributing to a significant part of its portfolio. It was the most profitable MFI in India at the time, with industry-leading operating metrics, and on track for a successful IPO; but like other AP-based MFIs, got significantly impacted by the AP crisis.

However, with support from lenders and investors, and through the commitment and leadership of Ms. Reddy, the company was able to continue to grow its operations outside AP, and steadily turn around the business. Driven by best-in-class operational practices, the company has been highly profitable for the last three years, and has built a high quality, well diversified loan portfolio outside of AP.

Spandana now operates in 13 states across India, with ~540 branches in various rural and semi-urban areas, and has over 2 million borrowers with a portfolio outstanding of INR 1,325 crores (~USD 200 million), with a target to once again become one of the largest, and most profitable MFIs in the country. The company also leverages its vast distribution network in rural and semi-urban areas to improve its clients’ quality of living by offering other products such as solar lanterns, mobile handsets, consumer durables, etc.

Nishith Desai Associates was the legal advisor to the company, AZB & Partners was the legal advisor to Kedaara Capital and Cyril Amarchand Mangaldas was the legal advisor to all 37 lenders.

Commenting on the fund raise:

Padmaja Reddy, Founder & Managing Director, Spandana Sphoorty Financial Limited said:

“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. This success is the consequence of the commitment and dedication shown by the entire Spandana team. We are very excited that Kedaara Capital had the vision to see the true capability of the organization, and had the belief in our ability to further build on it.”


Sunish Sharma and Manish Kejriwal, Managing Partners of Kedaara Capital added:  

“This transaction is in line with Kedaara’s focus of investing behind, and taking very large stakes in, high quality businesses with potential to create market-leading positions driven by very talented management. Despite several obstacles post the AP Crisis, Spandana has been able to demonstrate strong recovery, good growth and great profitability over the last three years. We strongly believe in the passion, commitment, dedication and strong leadership of Padmaja and are confident that our partnership will go a long way in building the most credible, transparent, respected and highly profitable MFI in India. We believe this is an opportune time to invest in the MFI sector, with Spandana being especially well-positioned to benefit from the sector tail winds, due to its best-in-class leadership, a geographically well-diversified loan portfolio, and a strong reach across its target geographies.”

Abhijit Ray, Co-Founder & Managing Director, Unitus Capital shared:

“We, at Unitus Capital, are proud to have developed a strong relationship with a highly credible, immensely efficient and profitable institution like Spandana, led by a dynamic leader – Ms. Padmaja Reddy. With the infusion of capital from Kedaara and leading banks, Spandana can resume its journey of high growth and scale new heights.”


About Spandana Sphoorty Financial Limited:

For more information on Spandana:

About Kedaara Capital:

Kedaara Capital is an operationally oriented private equity firm pursuing control and minority investment opportunities in India. Kedaara partners with entrepreneurs, management teams, and family-owned businesses and provides deep strategic and operational expertise, a consultative approach, and global connectivity to build enduring value and competitiveness in such businesses.

For more information on Kedaara Capital:

About Ontario Teachers’:

The Ontario Teachers’ Pension Plan (Ontario Teachers’) is Canada’s largest single-profession pension plan, with C$175.6 billion in net assets at December 31, 2016.  It holds a diverse global portfolio of assets, 80% of which is managed in-house, and has earned an annualized rate of return of 10.1% since the plan’s founding in 1990. The defined-benefit plan, which is fully funded, invests and administers the pensions of the province of Ontario’s 316,000 active members and retired teachers.

For more information, visit and follow us on Twitter @OtppInfo.

About Unitus Capital:

Unitus Capital is a boutique investment bank focused on raising debt and equity for impactful businesses across various sectors such as; microfinance, other financial institutions, affordable healthcare, affordable education, agriculture, renewable energy, technology and women empowerment. Till date, Unitus Capital has raised over USD 1.5 billion in debt and equity for approximately 80 social enterprises across India, Australia, Philippines and Cambodia.

For more information on Unitus Capital: and follow us on Twitter @Unitus_Capital