SKS Microfinance, a microfinance institution (MFI) that caters to women in India, plans to sell shares as part of a USD 250 million initial public offering (IPO) from July 28 to July 30. The price range at which the shares will be sold will be announced on July 26. The sale will be managed by Citigroup, a financial services firm based in New York City, USA; Credit Suisse, a financial services firm based in Zurich, Switzerland; and Kotak Mahindra, a financial services group in Mumbai, India [1].
As originally reported by MicroCapital on June 16, 2010, there have been concerns that this may trigger a trend in IPOs in India, thus bringing in profit-maximizing investors that may pressure MFIs to disburse riskier microloans. For further information see the full story below [4].
According to the MIX Market, the microfinance information clearinghouse, as of March 31, 2009, SKS Microfinance had USD 596 million in total assets, 3.5 million active borrowers, a return on assets of 3.68 percent and return on equity of 18.72 percent [2].
By Conner Brannen, Research Assistant
About SKS Microfinance:
SKS Microfinance is a microfinance institution (MFI), launched in 1998, that caters to women clients in India. In 2005, it transformed into a for-profit non-banking financial company (NBFC). As of September 2009, SKS had 1,676 branches, compared with 771 branches in March 2008. According to the MIX Market, the microfinance information clearinghouse, its total assets, as of March 31, 2009, were USD 596 million with 3.5 million active borrowers, and it reported return on assets of 3.68 percent and return on equity of 18.72 percent. SKS Microfinance offers products including: income generating loans, mid-term loans, individual loans, loan cover insurance and health insurance. Equity investors include Sequoia Capital, Vinod Khosla, Small Industries Development Bank of India, Bajaj Allianz, Yatish Trading, Kismet Capital, Sandstone Capital, Silicon Valley Bank and Unitus.
Sources and Additional Resources:
[1] Bloomberg Businessweek: “SKS Microfinance to Sell Shares July 28-July 30, Document Shows,” July 12, 2010: http://www.businessweek.com/news/2010-07-12/sks-microfinance-to-sell-shares-july-28-july-30-document-shows.html
[2] MicroCapital Universe Profile: SKS Microfinance: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=SKS+Microfinance
[3] MICROCAPITAL BRIEF: Microloan Default Risk Rises in India as SKS Microfinance Plans Initial Public Offering (IPO), June 23, 2010: https://www.microcapital.org/microcapital-brief-microloan-default-risk-rises-in-india-as-sks-microfinance-plans-initial-public-offering-ipo/
[4] MICROCAPITAL BRIEF: India’s SKS Microfinance IPO Could Trigger Trend in Microlending, June 16, 2010. https://www.microcapital.org/microcapital-brief-indias-sks-microfinance-ipo-could-trigger-trend-in-microlending/#more-5208
[5] MICROCAPITAL BRIEF: Initial Public Offering (IPO) of India-based Microfinance Institution (MFI) SKS Microfinance Raises Questions about Ethics within the Industry, April 13, 2010. https://www.microcapital.org/microcapital-brief-initial-public-offering-ipo-of-india-based-microfinance-institution-mfi-sks-microfinance-raises-questions-about-ethics-within-the-industry/
[6] MICROCAPITAL BRIEF: SKS Microfinance, a Microfinance Institution (MFI) Based in India, Expected to File for Initial Public Offering (IPO) in Next Four Weeks, March 9, 2010. https://www.microcapital.org/microcapital-brief-sks-microfinance-a-microfinance-institution-mfi-based-in-india-expected-to-file-for-initial-public-offering-ipo-in-next-four-weeks/#more-4531
[7] MICROCAPITAL STORY: SKS Microfinance Plans for India’s First Microfinance Institution’s (MFI) Initial Public Offering (IPO), Managed by Citigroup, Credit Suisse and Kotak Mahindra Capital, October 12, 2009. https://www.microcapital.org/microcapitalorg-story-sks-microfinance-plans-for-india%E2%80%99s-first-microfinance-institution%E2%80%99s-mfi-initial-public-offering-ipo-managed-by-citigroup-credit-suisse-and-kotak-mahindra/#more-3815
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