Mumbai, June 11 -- India Ratings and Research stated that the downgrade and 'negative' outlook reflect the continued stress on Spandana's asset quality during FY25, leading to pressure on its consolidated profitability, largely on account of elevated credit costs and operating expenses.

Furthermore, the infusion of the confidence equity capital, as guided by the management during Q4 FY25, is yet to be completed. India Ratings notes that, as per the management's estimates, the capital infusion will be completed by Q2 FY26.

Spandana is one of the companies that have been most impacted by the microfinance crisis, and the rating action reflects the significant losses reported by the company during FY25, higher than the India Ratings' estima...