Home / Markets / Stock Markets /  Financial stock hits upper circuit after sale of stressed loan portfolio

Shares of Spandana Spoorthy Financial Ltd surged to hit upper circuit level of 5% on the BSE at 575 apiece in Thursday's early trading session after the NBFC informed that the board of the company has approved the transfer of stressed loan portfolio to an asset reconstruction company (ARC), including the written-off loans of 323 crore.

“..the Board of Directors of the Company vide its resolution dated December 28, 2022, Wednesday has approved the transfer of stressed loan portfolio including written off loans of 323.08 Crore outstanding as on September 30, 2022 to an Asset Reconstruction Company (ARC) pursuant to Swiss Challenge Method for a consideration of 95 Crore," the company announced in an exchange filing yesterday.

Last month, the microfinance lender had said it was to raise up to 300 crore by issuing bonds as the board of directors in a meeting held on November 16, 2022, had approved to issue market-linked rated non-convertible debentures (NCDs) with a base issue size of 200 crore and green shoe option of 100 crore.

Spandana Sphoorty Financial Ltd is a Micro Finance firm head-quartered at Hyderabad, India. It is a public limited company registered with Reserve Bank of India (RBI) as an NBFC-MFI. Spandana, founded by Padmaja Reddy in 1998, was initially set up as a society which later transformed into an NBFC and then finally as an NBFC-MFI. The financial stock has surged over 27% in 2022 whereas it is up about 39% in the last six months.

During the quarter ended September 2022 (Q2), Spandana Sphoorty posted a consolidated net profit of 55 crore as compared to reporting a loss of 58 crore in the same quarter of the current fiscal. Meanwhile, the lender's income dipped to 310 crore, down 21.7% from the year ago quarter.

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