Micro finance institution (MFI) Spandana Sphoorty has raised Rs 400 crore by issuing non- convertible debentures to Aditya Birla Sun Life Mutual Fund.
IFMR Capital, which facilitated this transaction, said it is the first investment by a mutual fund into Spandana post the MFI exiting corporate debt restructuring back in 2011 during the Andhra Pradesh micro-finance industry crisis.
"This transaction highlights the resurgence of interest from capital markets in the microfinance sector. Coming in the wake of demonetisation, it is a significant vote of confidence for the sector," IFMR Capital said in a release.
Aditya Birla Sun Life Mutual Fund said: "Historically, we have been extremely cautious about taking MFI credit exposure. Spandana has risen above all odds to perform much better than its peers. Our investment in the company is guided by its strong fundamentals and improving industry scenario."
IFMR Capital CEO Kshama Fernandes hoped funding to Spandana will be the first of many such investments by mutual funds in the company.
Padmaja Reddy, managing director of Spandana, said micro finance as a business has evolved a lot since it took shape in the late 1990s and it has proven beyond doubt that it can withstand all the adversities.
"Raising USD 100 million equity after demonetisation and Rs 400 crore from Aditya Birla Sun Life MF is a testimony to this," she added.
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