The board of Indian microfinance institution (MFI) SKS Microfinance reportedly has approved plans to raise INR 900 crore (approximately USD 184 million) through a qualified institutional placement (QIP), whereby newly-issued shares will be sold to institutional investors [1]. A QIP sometimes is considered a quick way for listed companies to raise capital by issuing shares or convertible securities to a select group without having to undergo elaborate procedural requirements [2]. SKS raised INR 1,654 crore (USD 338 million) in its initial public offering (IPO) in July 2010 [1].
SKS Microfinance Chairman Vikram Akula reportedly said that the Regulation of Microlending Act of the Indian state Andhra Pradesh has hampered the company’s growth in the state, resulting in a five percent reduction in its company-wide loan portfolio [1]. According to 2010 data from the US-based nonprofit Microfinance Information Exchange (MIX), SKS Microfinance holds total assets of USD 1.2 billion, a gross loan portfolio of USD 1.2 billion, approximately 6.6 million borrowers, return on assets (ROA) of 6.3 percent and return on equity (ROE) of 22.4 percent.
By Kristha Abores, Research Associate
About SKS Microfinance:
SKS Microfinance is a microfinance institution (MFI) that was launched in 1998. It delivers microfinance products through a group-lending model to impoverished women in India as a for-profit, non-banking finance company. SKS converted into a public limited company in May 2009 and launched an initial public offering on July 28, 2010. Its equity investors include Quantum Hedge Fund, Sequoia Capital, Vinod Khosla, Small Industries Development Bank of India, Bajaj Allianz, Yatish Trading, Kismet Capital, Sandstone Capital, Silicon Valley Bank and Unitus. According to 2010 data from the US-based nonprofit data provider Microfinance Information Exchange (MIX), SKS Microfinance holds total assets of USD 1.2 billion, a gross loan portfolio of USD 1.2 billion, approximately 6.6 million borrowers, return on assets (ROA) of 6.3 percent and return on equity (ROE) of 22.4 percent.
Sources and Additional Resources:
[1] Economic Times: “SKS Microfinance to raise Rs 900 cr via share sale”, http://articles.economictimes.indiatimes.com/2011-11-02/news/30350214_1_shares-of-sks-microfinance-vikram-akula-mfis
[2] Finance Buzz: “SKS micro to raise Rs 900 crore via share sale”, http://expressbuzz.com/finance/sks-micro-to-raise-rs-900-crore-via-share-sale/329364.html
MicroCapital.org article, October 11, 2011, “MICROCAPITAL BRIEF: Supreme Court of India Sends SKS Back to Andhra Pradesh High Court to Challenge Microfinance (Regulation of Moneylending) Act of 2010”, https://www.microcapital.org/microcapital-brief-supreme-court-of-india-sends-sks-back-to-andhra-pradesh-high-court-to-challenge-microfinance-regulation-of-moneylending-act-of-2010/
MicroCapital.org article, August 1, 2011, “MICROCAPITAL BRIEF: Indian Microfinance Institution SKS Reports Quarterly Loss, Looks to Raise $200m Through Private Placements,” https://www.microcapital.org/microcapital-brief-indian-microfinance-institution-sks-reports-quarterly-loss-looks-to-raise-200m-through-private-placements/
MicroCapital.org article June 7, 2011, “MICROCAPITAL BRIEF: Paper Gains on Early Investment in SKS Microfinance Largely Evaporate For Sequoia Capital”, https://www.microcapital.org/microcapital-brief-paper-gains-on-early-investment-in-sks-microfinance-largely-evaporate-for-sequoia-capital/
MicroCapital.org article, May 23, 2011, “MICROCAPITAL BRIEF: Supreme Court Schedules Hearing on Petition Filed by SKS Microfinance Against Over Regulation of Moneylending Act of India’s State of Andhra Pradesh,” https://www.microcapital.org/microcapital-brief-supreme-court-schedules-hearing-on-petition-files-by-sks-microfinance-against-over-regulation-of-moneylending-act-of-indias-state-of-andhra-pradesh/
MicroCapital.org article, May 19, 2011, “MICROCAPITAL BRIEF: Confusion Continues Over Regulation of Microfinance Institutions (MFIs) in India, State of Andhra Pradesh May Adjust Law to Reconcile With Federal Rules,” https://www.microcapital.org/microcapital-brief-confusion-continues-over-regulation-of-microfinance-institutions-mfis-in-india-state-of-andhra-pradesh-may-adjust-law-to-reconcile-with-federal-rules/
MicroCapital Universe Profile: SKS Microfinance, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=SKS+Microfinance
Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/
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