Spandana Sphoorty IPO subscribed 6% on Day 1

NEW DELHI: The Rs 1,200 crore initial public offering (IPO) by Spandana Sphoorty Financial got off to a tepid start on Monday amid a global market selloff. The IPO received bids for 5,71,285 shares against the total issue size of 98,22,367 shares.

Quota for qualified institutional buyers (QIBs) was subscribed 19 per cent.

On Friday, the lender raised around Rs 360.28 crore from 18 anchor investors, including Wells Fargo Emerging Markets Equity Fund, Florida Retirement System, Bajaj Allianz Life Insurance company, among others.


At the upper end of the price band, the issue is demanding valuation at price-to-adjusted book value (P/ABV) of 2.4 times. Peers such as Creditaccess Grameen trades at P/ABV of 3.4 times while Satin Credit Care commands 1.1 times.

Analysts noted that the rural-focused MFI had in March 2017 exited from a corporate debt restructuring (CDR) mechanism, well ahead of the scheduled date of March 2018.

They believe that the microfinance company has the scope to deliver healthy growth, but prevailing market conditions are against microfinance companies and, hence, they advised investors to consider the IPO only from a long-term perspective.