Spandana Sphoorty Financial Limited, a microfinance institution (MFI) based in India, is reportedly likely to hire three global firms to manage its initial public offering (IPO): Citigroup, a US-based international financial services conglomerate; Morgan Stanley, a global financial services firm headquartered in New York City; and JM Financial Limited, an integrated financial services group based in India. Spandana reportedly is seeking to raise the equivalent of USD 400 million through the IPO. Bloomberg reports that this information was obtained through “four people with direct knowledge of the matter” [1].
As of 2009 and according to the Microfinance Information Exchange (MIX) Market, the microfinance information clearinghouse, Spandana reports total assets of USD 647 million, a gross loan portfolio of USD 474 million, and 3.6 million borrowers with an average loan balance of USD 129 per borrower. Also as of 2009, Spandana reports a return on assets of 8.99 percent and a return on equity of 55.7 percent.
News of Spandana’s possible IPO comes in the wake of another Indian IPO: that of SKS Microfinance, a large Indian microlender. SKS Microfinance’s IPO resulted in a company valuation of INR 74.7 billion (USD 1.6 billion) [2].
By Lindsey Shaughnessy, Research Associate
About Citigroup: Citigroup is a US-based international financial services conglomerate with consumer and commercial banking, brokerage, asset management and institutional securities and transactions services operations. At the end of the second quarter, July 2010, Citigroup held total assets of USD 1.9 trillion.
About JM Financial Limited: JM Financial is an integrated financial services group offering a range of capital market services to its corporate and individual clients. The group has business interests in investment banking, institutional equity sales and broking, private and corporate wealth management, research, equity broking, portfolio management, asset management, commodity broking, non-banking financial company (NBFC) activities and private equity.
About Morgan Stanley: Morgan Stanley is a global financial services firm headquartered in New York City. Morgan Stanley operates in 36 countries around the world, with approximately 600 offices and 60,000 employees. The firm was established on September 16, 1935. The main areas of the firm today are global wealth management, institutional securities and asset management. As of March 2010, Morgan Stanley reported USD 820 billion in total assets.
About SKS Microfinance: SKS Microfinance is an Indian microlender that delivers microfinance products through a group lending model to impoverished women in India. It is a for-profit non-banking finance company which converted to a public limited company in May 2009 and launched an initial public offering on July 28, 2010. Equity investors include Quantum Hedge Fund, Sequoia Capital, Vinod Khosla, Small Industries Development Bank of India, Bajaj Allianz, Yatish Trading, Kismet Capital, Sandstone Capital, Silicon Valley Bank and Unitus. Its total assets as of March 31, 2009, were USD 596 million with 3.5 million active borrowers, and it reported return on assets of 3.68 percent and return on equity of 18.72 percent.
About Spandana Sphoorty Financial Limited: Spandana Sphoorty Financial Ltd. provides microcredit and credit-plus services to low-income households in India. The Company was founded by Padmaja Reddy in 1998 and receives its funding from development financial institutions and banks. As of 2009 and according to the Microfinance Information Exchange (MIX) Market, the microfinance information clearinghouse, Spandana reports total assets of USD 647 million, a gross loan portfolio of USD 474 million, and 3.6 million borrowers with an average loan balance of USD 129 per borrower. Also as of 2009, Spandana reports a return on assets of 8.99 percent and a return on equity of 55.7 percent.
Resources and Additional Sources:
[1] Bloomberg: “Micro-Lender Said to Hire Citigroup, Morgan Stanley, JM for IPO in India” by George Smith Alexander and Ruth David, August 19, 2010. http://www.bloomberg.com/news/2010-08-19/micro-lender-said-to-hire-citigroup-morgan-stanley-jm-for-ipo-in-india.html
[2] MICROCAPITAL BRIEF: “SKS Microfinance Launches India’s First Initial Public Offering (IPO) by a Microfinance Institution”, July 29, 2010. https://www.microcapital.org/microcapital-brief-sks-microfinance-launches-india%E2%80%99s-first-initial-public-offering-ipo-by-a-microfinance-institution/
MICROCAPITAL BRIEF: “Indian Microfinance Institution Spandana Sphoorty’s Board Actively Evaluating an Initial Public Offering”, August 5, 2010. https://www.microcapital.org/microcapital-brief-indian-microfinance-institution-spandana-sphoorty’s-board-actively-evaluating-an-initial-public-offering-ipo/
MicroCapital’s Microfinance Universe profile: Citigroup
MicroCapital’s Microfinance Universe profile: JM Financial
MicroCapital’s Microfinance Universe profile: Morgan Stanley
MicroCapital’s Microfinance Universe profile: SKS Microfinance
MicroCapital’s Microfinance Universe profile: Spandana Sphoorty Financial Limited
Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/.
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