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Spandana Sphoorty Financial Limited - Business Updates

Posted On: 2021-11-23 11:46:02 (Time Zone: IST)

The Management Committee of the Board of Spandana Sphoorty Financial Limited's (NSE: SPANDANA; BSE: 542759, the "Company") is fully engaged in supporting day-to-day operations. Spandana continues to perform strongly under the experienced leadership of its Chief Business Officer Mr. Amit Biswal, Chief Risk Officer Ms. Sharmila Kunguma and Company Secretary Mr. Ramesh Periasamy. The field team has responded positively to the transition, and Spandana continues to grow on various operational parameters significantly. Spandana has also hired independent third-party firms Alvarez & Marsal, PwC and CAM to provide support and conduct special review exercises during the leadership transition, and they are already fully engaged.

Spandana's business demonstrated healthy performance in the quarter that ended September 30, 2021 (unaudited basis), with standalone collection efficiency for the entire quarter of 105% and 113% for the month of September, including pre-payments. Excluding these, the standalone collection efficiency was 97% for the entire quarter and 99% for the month, respectively.

For the partial month of November, till November 16, 2021, the Company collected approximately INR 400 crore (standalone basis), which includes approximately INR 30 crore of advance collections done at the end of October related to loan instalments due in November, which is in line with collection trends from previous months. It has sufficient liquidity with cash and cash equivalents of approximately INR 1,300 crore, and additional undrawn sanctions of over INR 1,000 crore. It has been making all lender repayments on schedule and has already repaid INR 154 crore as of November 17, 2021. Further, it is on track to make additional repayments of INR 181 crore for the rest of the month.

The standalone disbursal volumes are also healthy at over Rs. 1,150 crores for the quarter ended September 30, 2021, with September alone accounting for Rs. 578 crores, resulting in closing assets under management ("AUM") of Rs. 7,034 crores (standalone basis). The company has also now recommenced new branch openings and new customer acquisitions, which will be further ramped up in the coming weeks.

The company has resumed the audit of the financial results for the quarter ended September 30, 2021, following a brief transition-related hiatus. It expects to be able to announce results in the next few weeks.

The Management Committee is also in the process of addressing gaps in the transition of services from the previous Managing Director, Ms. Padmaja Reddy. Shortly prior to her resignation, Ms. Reddy had transferred the company's IT systems to a new IT vendor and outsourced its management to that vendor. There has been no meaningful impact on the day-to-day business operations of the company from this. However, to ensure a smooth transition and business continuity, Spandana is taking steps to engage with this new vendor appropriately and has also made good progress on creating a parallel IT environment. Additionally, some potential concerns have been brought to the Board's notice regarding certain gold loan branches of Spandana's subsidiary, Criss Financial Limited. It is currently in the process of confirming the status of the same. The matter relates to its branches with a combined portfolio of less than 1% of Spandana's consolidated AUM, and therefore would not have a material financial impact on the company.

Spandana's Board reiterates its aim to grow the company and take it to greater heights with a professional and highly pedigreed management team. It remains fully committed to supporting the business and ensuring a smooth management transition and robust long-term trajectory.

Shares of Spandana Sphoorty Financial Limited was last trading in BSE at Rs. 441.50 as compared to the previous close of Rs. 465.35. The total number of shares traded during the day was 7162 in over 717 trades.

The stock hit an intraday high of Rs. 467.45 and intraday low of 436.00. The net turnover during the day was Rs. 3178400.00.

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