Spandana Sphoorty Financial Limited — Credit Ratings, 12-06-2025: Credit Rating

ICRA has downgraded Spandana Sphoorty Financial Limited’s long-term rating to A- with a Negative outlook due to worsening asset quality and weak profitability in FY2025. Gross stage 3 assets rose to 5.6%, with delinquencies over 30 days jumping to 14.8%, driven by borrower overleveraging and collection challenges. Credit costs surged to 16.5% of average managed assets, leading to a consolidated net loss of 8.6% of managed assets and significantly weakening capital. Managed gearing remains comfortable at 2.3x, supported by substantial loan write-offs of Rs. 1,618 Cr and a planned equity raise of up to Rs. 750 Cr. Adequate liquidity with Rs. 1,356 Cr in cash is a positive, but profitability pressure and covenant waivers constrain near-term financial flexibility and could raise borrowing costs.