Spandana Places Rs 25Cr (USD 5.3 ml) Commercial Paper

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Feb 2010
Noida, India, February, 03 2010 - Spandana plans to utilise the fund to reduce the cost of borrowings.

In a move seen to open up more options for raising finance in the microfinance space, Spandana Sphoorty Financial Limited (SSFL), a Hyderabad-based microfinance institution, has announced that it has placed Rs 25 crore worth of commercial paper with a leading  mutual fund. Rabo India Finance Ltd acted as arranger for the issue. The name of the mutual fund was not disclosed.

Spandana plans to utilise the fund to reduce the cost of borrowings.

Claimed to be the first of its kind transaction in Asia by any MFI, Spandana says, the transaction has opened up a new asset class for investors enabling it to diversify its fund raising sources by tapping the capital and money markets. It says the transaction has also created a niche market for accessing low cost funds not only to the institution but also to the sector.

"It invokes the interest of money market players into this sector, enabling the microfinance players to raise to the stature of Indian corporate houses. We expect to do more such deals with other investors in the days to come,” Padmaja Reddy, managing director, Spandana added in the statement. 

Spandana currently has over 3.9 million clients with a portfolio of Rs 3,150 crore under management. It has raised several rounds of funds in 2009 through venture capital and debts to spearhead its growth. In September 2009, it raised $60 million or Rs 300 crore from Temasek Holdings. Earlier in July 2007, the company raised Rs 49 crore ($12.25 million) from JM Financial India Fund and Lok Capital. It has also raised Rs 50 crore ($12 million) funds from Rabo India as debt and another Rs 80 crore through the issue of non-convertible debenture last year.



Source : VCCircle
 

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