India's second largest microfinance firm after SKS, Spandana Microfinance, plans to raise around Rs1,500 crore through an initial public offer (IPO), its managing director Padmaja Reddy has confirmed.

She added that the company was in talks with Citigroup, Morgan Stanley and JM Financial.

Reddy added that the company which is set to kick off overseas operations in Nepal and China will use the proceeds from the IPO to set up 10 hospitals.

With a Rs600 crore equity base and 4.2 million borrowers, Spandana has total disbursals currently of around Rs4,200 crore. The company's cumulative disbursals stand at Rs16,000 crore. 

The stakeholders in Spandana include Lok Capital, JM Financial and Valiant, as also others while the promoters' group has a nearly 50 per cent holding.

SKS Microfinance recently became the first MFI in the country to tap the market through an IPO with which it raised $358 million.