Spandana Sphoorty Financial eyes AUM to grow to Rs 28,000 cr by FY28-end

Spandana Sphoorty Financial Ltd, a finance company working as a micro-finance institution (MFI), is looking to scale up its assets under management (AUM) to Rs 28,000 crore by the end of FY28 from the current Rs 10,000 crore.

Elaborating on the business strategy, Shalabh Saxena, managing director (MD), said it would diversify the asset book to have a share of non-microfinance business of 10-15 per cent by FY28.

At present, the micro-finance business constitutes 100 per cent of the loan book. It would continue with the joint liability group (JLG) model for microfinance in its loan book. There was enough headroom for growth through the JLG model.

The company may also offer individual retail loans. However, the share of retail loans would be less than five per cent of the AUM mix, Saxena said in a media interaction on its business roadmap.   

As for geographic diversification, Spandana plans to reduce the share of the top three states to 36 per cent by FY28 from the current 44 per cent. The share of any one state would be capped at 12 per cent.

Growth will be driven by customer acquisitions while keeping ticket sizes lower (capped at Rs 80,000) and closely monitoring the total debt of a customer.

Spandana expects 75-80 per cent of its disbursements/collections to move to the weekly model by FY28 from the current seven per cent. At present, the collections predominantly follow a monthly cycle.  

It does not envisage fresh capital infusion to grow loan book due to over 37 per cent capital adequacy. It would always maintain a capital adequacy ratio above 25 per cent, Saxena said.

Spandana would need Rs 600 crore of capital for infusion in its subsidiary CRISS Financials, which is into loans against properties and personal loans.