Spandana marginal borrowing cost falls to 10.6% in Q2FY27

Spandana Sphoorty Financial Limited reduced its marginal cost of borrowing to 10.6% in Q2FY27, about 260 basis points below the 13.2% reported in Q3FY26. Spandana’s funding mix also shifted toward banks, which accounted for 57% of Rs 4,724 crore of borrowing outstanding at September 2026, while liquidity stood at Rs 1,379 crore.

How much did Spandana’s marginal borrowing cost fall?

Spandana’s marginal borrowing cost fell to 10.6% in Q2FY27 from 11.3% in Q1FY27 and 13.2% in Q3FY26. The movement from Q3FY26 to Q2FY27 was about 260 basis points, where 100 basis points equal one percentage point. The reported marginal rate was also below the 12.0% recorded in Q4FY26.

The overall cost of borrowing declined to 12.3% in Q2FY27 from 12.8% in Q1FY27 and 13.2% in Q4FY26. It remained above the 12.2% reported in Q2FY26. The 10.6% marginal rate was therefore 170 basis points below the 12.3% cost of borrowing reported for Q2FY27.

Spandana reported drawing Rs 995 crore under the Credit Guarantee Scheme, or CGS, at 10.3% in Q2FY27, alongside non-CGS borrowing at 10.8%. The company raised Rs 1,427 crore of incremental borrowings in Q2FY27, compared with Rs 1,597 crore in Q1FY27 and Rs 160 crore in Q2FY26.

What changed in Spandana’s lender mix and debt volumes?

Banks became Spandana’s largest stated funding channel at 57% of borrowings outstanding at September 2026, up from 47% at June 2026 and 48% at September 2025. Bank share increased by 10 percentage points quarter on quarter and nine percentage points year on year. The change occurred as the marginal borrowing rate reached 10.6% in Q2FY27.

Total borrowings outstanding rose to Rs 4,724 crore at September 2026 from Rs 4,291 crore three months earlier and Rs 3,289 crore a year earlier. Non-banking financial companies, or NBFCs, represented 20% of the September 2026 total, compared with 21% in June 2026. Capital markets accounted for 23%, down from 31% in June 2026 and 29% in September 2025; no foreign portfolio investor share was shown for September 2026.

Incremental borrowings were Rs 3,024 crore in H1FY27, compared with Rs 160 crore in H1FY26. Spandana separately reported Rs 1,622 crore of total equity and debt funds raised in Q2FY27, including Rs 200 crore from the balance on partly paid shares. This total differs from the Rs 1,427 crore of incremental borrowing reported for the quarter.

How much liquidity and capital does Spandana have?

Spandana had liquidity of Rs 1,379 crore at September 2026 and a consolidated capital to risk-weighted assets ratio, or CRAR, of 33.5%. Liquidity was Rs 63 crore higher than the Rs 1,316 crore reported at June 2026, although it was below Rs 1,438 crore at March 2026 and Rs 1,626 crore at December 2025. Cash and bank balances represented 19% of assets at September 30, 2026, while the loan portfolio represented 69%.

Consolidated CRAR was 33.5% at September 2026, compared with 33.8% at June 2026 and 47.0% at September 2025. Standalone CRAR increased to 30.2% at September 2026 from 28.6% in June 2026, though it was below 36.5% a year earlier. Consolidated net worth reached Rs 2,343 crore at September 2026, including proceeds from the final tranche of the rights issue, compared with Rs 2,140 crore in June 2026.

Consolidated gearing was unchanged at 2.0 times at June 2026 and September 2026. The September 2026 balance sheet combined Rs 1,379 crore of liquidity, Rs 4,724 crore of outstanding borrowings and Rs 2,343 crore of consolidated net worth. Spandana’s assets under management, or AUM, increased 10% quarter on quarter to Rs 5,364 crore in Q2FY27 from Rs 4,887 crore in Q1FY27.

How does Spandana’s funding improvement align with operating trends?

Spandana’s lower marginal funding cost was reported alongside higher disbursements, AUM and profitability in Q2FY27. Disbursements rose 8% quarter on quarter to Rs 1,481 crore, while AUM was 31% above Rs 4,088 crore in Q2FY26. Net interest income rose 25% quarter on quarter to Rs 169 crore from Rs 135 crore in Q1FY27.

Pre-provision operating profit, or PPOP, rose to Rs 79 crore in Q2FY27 from Rs 40 crore in Q1FY27, while profit before tax increased to Rs 37 crore from Rs 18 crore. Profit after tax was Rs 18 crore, compared with Rs 12 crore in the preceding quarter. Impairment was Rs 15 crore in Q2FY27, following a Rs 1 crore writeback in Q1FY27.

Asset-quality measures also improved over the periods reported. Gross non-performing assets were 2.54% in Q2FY27, down from 3.64% in Q1FY27 and 5.62% in Q2FY26; net non-performing assets fell to 0.50% from 0.68% and 1.17%, respectively. Portfolio at risk for 30 days or more improved to 3.1% in September 2026 from 4.4% in June 2026 and 9.5% in September 2025.

Conclusion

Spandana combined a 10.6% marginal borrowing cost in Q2FY27 with greater reliance on banks, which supplied 57% of its Rs 4,724 crore of outstanding debt at September 2026. Incremental borrowings of Rs 3,024 crore in H1FY27 supported a 10% quarter-on-quarter increase in AUM, while Rs 1,379 crore of liquidity and Rs 2,343 crore of consolidated net worth formed the reported balance-sheet position.

What to watch next is whether Spandana maintains borrowing rates around the 10.3% CGS and 10.8% non-CGS pricing disclosed for Q2FY27 while expanding AUM. Management also disclosed that a new loan-origination system is in pilot, the micro loan-against-property business is being restructured toward ticket sizes of Rs 5 lakh to Rs 15 lakh, and the CFL merger is progressing as planned.