Spandana Sphoorty Financial Limited's shares surged by nearly 4% during the morning session on September 24, 2024, following the company's decision to offload its stressed loan portfolio for ₹16.74 crore. This strategic move reflects the firm’s ongoing efforts to improve its financial position, making it an attractive time to invest in stocks related to financial services.
Strategic sale of stressed loans
The company’s board has greenlit the sale of a stressed loan portfolio, which includes written-off loans with an outstanding balance of ₹304.41 crore as of June 30, 2024. This significant sale was made to an Asset Reconstruction Company (ARC), indicating Spandana Sphoorty’s focus on reducing financial risks and enhancing profitability.
For those looking to invest in stocks, especially in the financial sector, this move showcases the company's commitment to strengthening its balance sheet.
Subscription of security receipts
According to the company's official exchange filing, the ARC has subscribed to 91.50% of the security receipts, which amount to ₹15.32 crore. Meanwhile, Spandana Sphoorty itself retained a smaller stake, subscribing to 8.50% of the security receipts, valued at ₹1.42 crore.
This collaboration with the ARC not only signals confidence in future recovery but also positions the company well for investors aiming to invest in stocks in the near term.
Share performance amid market activity
At 9:50 AM on September 24, Spandana Sphoorty Financial's shares were trading at ₹606 on the NSE, reflecting a 2.3% rise. A total of 2 lakh shares exchanged hands during early trade, surpassing the one-month daily average of 1.7 lakh shares. This increased trading volume underscores the growing interest among traders and could be a strong indicator for those planning to invest in stocks in the financial services sector.
Changing ownership patterns
Since the March 2023 quarter, there has been a gradual reduction in the promoters’ shareholding, which has decreased from 63% to 56.9% by the end of June 2024. Interestingly, this has been accompanied by a rise in Foreign Institutional Investor (FII) and retail investor interest, signalling a shift in market sentiment.
As more investors opt to invest in stocks, especially in promising NBFCs like Spandana Sphoorty, this trend may lead to long-term stock appreciation.
Stock performance over the past year
Despite the recent surge in share price, Spandana Sphoorty’s stock has seen a 20% dip over the past year. In contrast, the benchmark Nifty 50 index has gained approximately 31% during the same period. For investors looking to capitalise on market shifts, the current pricing of Spandana Sphoorty shares presents an opportune moment to invest in stocks, particularly as the company positions itself for potential recovery following the loan sale.
This could be an ideal time for discerning investors to consider adding Spandana Sphoorty Financial to their portfolios, especially with the company’s renewed focus on growth and improved asset management strategies.
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