Spandana Sphoorty Financial Limited — Credit Ratings, 02-07-2025: Credit Rating

Crisil Ratings has downgraded Spandana Sphoorty Financial Limited’s long-term bank loan facilities rating to ‘Crisil BBB+/Stable’ from ‘A-/Stable’, with total rated facilities reduced to Rs 1,700 Cr from Rs 3,500 Cr. The downgrade reflects higher-than-expected pressure on asset quality and profitability due to elevated credit costs stemming from borrower over-indebtedness, operational challenges, and regional disruptions. Gross NPAs increased to 5.6% and net NPAs to 1.2% as of March 2025, with FY25 losses at Rs 1,035 Cr, marking a sharp drop from profit reported in FY24. Despite these setbacks, Spandana maintains comfortable capitalisation with a strong CAR of 36% and low gearing (2.1x), supported by plans to raise up to Rs 750 Cr in equity. The downgrade may increase borrowing costs and puts focus on timely equity infusion and asset quality recovery to restore investor confidence.