Spandana Sphoorty’s credit ratings reaffirmed, limits reduced by CARE

Spandana Sphoorty Financial Limited (SSFL) received an intimation from CARE Ratings Limited on December 19, 2025, detailing reaffirmed ratings, reduced limits, and new ratings for its instruments. Long-term Bank Facilities of ₹800.00 crore were reaffirmed at CARE BBB+ (Stable). For Non-Convertible Debentures, ₹280.00 crore were assigned CARE BBB+ (Stable), while existing debentures of ₹450.00 crore (reduced from ₹500.00 crore) and ₹150.00 crore (reduced from ₹200.00 crore) were reaffirmed at CARE BBB+ (Stable). Commercial Paper of ₹100.00 crore was reaffirmed at CARE A2.

The ratings reflect SSFL's adequate capitalization profile, with a total capital to risk-weighted assets ratio (CRAR) of 36.5% and gearing of 2.1x as of September 30, 2025. The company also maintained an adequate liquidity profile with on-balance sheet liquidity of ₹1,179 crore. However, the ratings are constrained by weak profitability and deteriorated asset quality, as SSFL reported a net loss of ₹609 crore in H1FY2026. Stage 2 and stage 3 assets remained elevated at 10.3% cumulatively as of September 30, 2025, after writing off ₹1,060 crore during H1FY26.

CARE Ratings also noted SSFL's continued decline in the scale of operations, with a year-over-year degrowth of approximately 61% in H1 FY2026, and breaches of some financial covenants related to its borrowings. However, debenture holders for certain amounts have provided waivers, and no bankers or lenders have exercised options for accelerated repayment.