Spandana Sphoorty transfers ₹494 crore stressed loans to ARC under Swiss Challenge route

Spandana Sphoorty Financial Ltd has approved the transfer of a stressed loan portfolio, including written-off accounts, to an asset reconstruction company (ARC) for a consideration of ₹34.55 crore.

In a regulatory filing, the microfinance lender said its management committee of the board, through a resolution dated December 29, 2025, cleared the transfer of stressed loans amounting to ₹493.55 crore outstanding as of October 31, 2025. The transaction will be executed under the Swiss Challenge Method

in line with extant Reserve Bank of India master directions.

The move comes as the lender continues efforts to clean up its balance sheet amid pressure on asset quality and profitability.

Separately, the company last week said its board approved the allotment of non-convertible debentures (NCDs) worth ₹415 crore through a private placement to strengthen its funding base. The company allotted 41,500 rated, listed, senior, secured, redeemable and taxable NCDs, each with a face value of ₹1 lakh, pursuant to a board resolution passed on December 23.

In recent management changes, Spandana Sphoorty appointed Venkatesh Krishnan as its managing director and chief executive officer, effective November 27.

On the financial front, the lender reported a sharp deterioration in its September 2025 quarter performance. Net sales fell 66.56% year-on-year to ₹229.55 crore, while the net loss widened to ₹249.13 crore. EBITDA stood at a negative ₹203.30 crore, compared with a negative ₹24.73 crore in the year-ago period.

Shares of Spandana Sphoorty Financial Ltd closed at ₹271 on the BSE on Monday, down 1.38%.