MUMBAI, Aug 19 - Spandana Sphoorty Financial, one of India's leading microfinance firms, has shortlisted Morgan Stanley, Citi and JM Financial for an up to $400 million IPO, two sources with direct knowledge said.
The share offering by Spandana is likely to be launched early next year, the sources, who declined to be named as they were not authorised to speak to the media, said on Thursday.
Padmaja Reddy, founder and managing director of Spandana, could not immediately be reached for comment.
Spandana's share sale is expected to be launched in the first quarter of 2011 and the documents to seek the market regulator's approval will be filed in the next couple of months, one of the sources said.
Monday's strong market debut for India's largest microlender, SKS Microfinance, which counts U.S. billionaire George Soros as one of its investors, has boosted prospects of more of such offers in the world's largest market for small loans.
At least half a dozen large microfinance institutions, buoyed by the response to SKS, may be contemplating IPOs, analysts have said. These may include Share Microfin Ltd, Asmitha Microfin and Bhartiya Samruddhi Finance.
There are more than 400 active microfinance institutions in India serving about 70 million poor people, according to industry estimates. With a potential base of 120 million unbanked homes, microcredit demand in India has the potential to rise sharply.
While microfinance has existed in many forms for decades, the sector has burgeoned into a large market since Muhammad Yunus, a Bangladeshi economist, was awarded the Nobel Peace Prize in 2006 for increasing access to finance for the poor.
Indian firms have raised a total of about $14 billion through share sales so far this year from 74 issues, compared with $16 billion raised in 2009 from 89 offerings, according to Thomson Reuters Data.