Spandana Sphoorty Financial Limited — Credit Ratings, 11-06-2025: Credit Rating

India Ratings has downgraded Spandana Sphoorty Financial Limited’s non-convertible debentures and bank loans to IND A- with a Negative Outlook. The downgrade reflects ongoing asset quality stress in FY25, rising credit costs and operating expenses, along with delayed capital infusion expected only by 2QFY26. Increasing portfolio delinquencies due to borrower over-indebtedness and external disruptions have pressured profitability and collections. Although the company maintains a diversified loan book and net worth of INR 213.8 Cr as of March 2025, higher borrowing costs and funding challenges persist. This rating action restricts strategic flexibility and is likely to keep borrowing costs elevated, while investor confidence remains cautious amid restructuring and management changes.