While evaluating the initial public offering (IPO) of microfinance player Spandana Sphoorty Finance, the question is whether there is appetite for businesses which have bounced back from a major crisis. Examples such as Suzlon haven’t demonstrated success in doing so post the corporate debt restructuring (CDR) exercise.
But the differentiating factor is that unlike other businesses, microfinance has retained its sheen as a promising space in India. Post the 2010-11 crisis, regulations have been strengthened and more importantly, organised microfinance institutions (MFIs) have vacated the Andhra Pradesh/ Telengana region.
To that extent, Spandana’s business is a new one, with almost no baggage