Spandana Sphoorty Aims To Expand Portfolio To Rs 28,000 Crore By Fiscal 2028

Spandana Sphoorty Financial Ltd. is planning to raise assets under management to Rs 28,000 crore by financial year 2028.

The expansion will be led by loan against property and nano enterprises portfolio, the microfinance lender said during an investor meeting on Monday.

The company is aiming for 75 times growth in asset under management of the two arms from Rs 46 crore in September quarter to as much as Rs 3,500 crore by FY28, with up to 3 lakh borrowers.

Spandana is planning to increase the share of shorter tenure loans in its distribution network. It is also planning to raise the share of 12-month loans to 10-15% by FY28 from 3% in the September quarter, and 18-month loans to as much as 25% from 8%. While, loans with a tenure of 24 months will stand at 70-75% of the portfolio from the current 89%.

While microfinance loans are not governed by the banking regulator, Spandana's decision to promote shorter tenure loans goes against the broader lending ecosystem, in light of the tighter lending norms introduced by the Reserve Bank of India.

Spandana will shift books to reduce the share of monthly disbursements in favour of weekly ones. As of September, the lender was making monthly disbursements for 93% of its books, and only 7% weekly disbursements. By FY28, it wants to grow weekly disbursements to 75-80%, bringing down monthly disbursements to 20-25%.

The lender will also increase its customer base to 62 lakh from the current 27 lakh, while increasing the ratio of borrowers per loan officer to 450 to 475. It will also expand lending to existing customers.

The guidance of Rs 28,000 crore AUM is "realistic and not aggressive", Motilal Oswal Financial Services Ltd. said in a note. The brokerage has a 'buy' rating on the stock, with a target price of Rs 1,017, implying an upside of 18%.

"This growth will be driven by customer acquisitions, while keeping ticket sizes lower (capped at Rs 80,000) and closely monitoring total debt of a customer," the brokerage said.

All eight analysts tracking the company have a 'buy' rating. The average of analysts' target price stands at Rs 1,151 per share, implying an upside of 10.4%.