Things to know before applying Spandana Sphoorty IPO – review, allotment, subscription, gmp & many more

spandana-sphoorty-review

 

Spandana Spoorty IPO details :

IPO date:                   5 August – 7 August 2019
Issue Size:                1200 Cr
Offer Price:              Rs 853 – Rs 856 Per Equity Share
Market Lot:              17 Shares & multiples
Exchange Listing:   BSE, NSE

IPO Timelines (tentative dates):

Allotment & refund:    14 August
Credit to Demat:           16 August
Listing on Exchange:   19 August

Company Promoters: Padmaja Gangireddy and Kangchenjunga Limited

Objective of the Issue:

Offer For Sale (OFS) & Fresh issue for Augmenting the capital base.

IPO Registrar: Karvy computershare pvt. ltd.

Company Overview:

  • Incorporated in 2003, Spandana Sphoorty Financial Ltd is a rural area focused NBFC-Microfinance Institution.
  • The company is offers small-ticket unsecured loans to help the women in the low-income bracket in rural areas. The company provides income generation loans, business loans and loans against gold jewellery.
  • Spandana has a presence across 15 states in India with 694 branch network.

company website: http://www.spandanaindia.com/

Spandana Spoorty IPO Review:

Financial Performance:

Spandana-spoorty-financials

valuations as on 31st Mar 2019:

1. Earning per share (EPS): 49.74
2. Price to Earning ratio (P/E): 16
3. Net NPA: 0.01%
4. Price to Book value: 2.7

Company category:  medium-grower

Strength:

  • Superior asset quality with almost nil NPA i.e. around 0.01%
  • Delivered impressive AUM growth and CAGR growth over last three years.
  • High focus on Micro-finance loans having focus on the high potential and under-served rural segment.
  • Improvement in Credit Rating in last year
  • Reasonable valuations w.r.t. peers.

Risks:

  • Microfinance loans are unsecured and are susceptible to various operational, credit and political risks.
  • If any downgrade of credit ratings may increase borrowing costs and constrain access to capital and
    debt markets
  • Current NBFC crisis in Indian share market.

Peer comparison: 

Spandana spoorty ltd can be compared with Credit access grameen & Satin Credit.

spandana-spoorty-ipo-peer-comparison

So compare to Creditaccess Grameen, the ipo is priced at reasonable valuation.
Credit Access IPO (Review) was listed with premium is the plus for this.

Analysis conclusion:

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  • Nil NPA, impressive AUM growth, high scope for micro-finance loans & reasonable valuation w.r.t. peers is plus.
  • But considering current NBFC crisis & pessimistic market sentiments are concern.
  • Considering all the factors our view is “POSITIVE” for thin listing gain.  But my recommendation is to watch QIB & NII subscription response till 1 pm (last day) & then take a decision accordingly.

BullRun IPO Ratings: 3 stars out of 5 stars

Analysis video link: https://youtu.be/S35r0FZikSg

Spandana spoorty IPO allotment check:

Spandana spoorty IPO subscription status:

spandana-spoorty-ipo-subscription-last-day

Abbreviations:

EPS – Earning per share
OFS – Offer for Sale
P/E – Price to Earning
RoE – Return on Equity
PAT – Profit After Tax
QIB – Qualified Institutional Buyer
NII – Non-Institutional Investors
RII – Retail Individual Investor
CAGR – Compounded Annual Growth Rate
NBFC – Non-Banking Finance companies
AUM – Asset under management
NPA – Non-performing Assets

Disclaimer & Conflict of Interest:

The above analysis is based on my understanding of the company and RHP of Spandana spoorty. You should research more and consult your financial adviser before taking any decision.

Analysis by –  NISM Certified Research Analyst & Investment Advisor.

3 comments

  1. Spandana spoorty ipo – Grey Market Premium (GMP) as of 5th august is 5 – 7 per share.

    On 2nd august, the ipo 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

    Like

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