MICROCAPITAL BRIEF: Upcoming Initial Public Offering (IPO) of SKS Microfinance Rated as Grade 4/5 By Credit Analysis and Research Limited (CARE Ratings)

Credit Analysis and Research Limited (CARE Ratings), a rating company based in Mumbai, India, has rated the upcoming initial public offering (IPO) of SKS Microfinance, a microfinance institution (MFI) that caters to women in India, as Grade 4/5, which indicates ‘above average fundamentals.’ The grading system takes into account the company’s financial position including asset quality, capital adequacy ratio, liquidity position and access to diverse sources of institutional funding; recent industry growth; prospects for future growth; and good corporate governance practices. As reported by MicroCapital, SKS Microfinance announced its intentions to sell shares as part of a USD 250 million IPO from July 28 to July 30.

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.

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:

Andhrabusiness.com: “SKS Microfinance IPO gets above average rating,” July 16, 2010:http://andhrabusiness.com/NewsDesc.aspx?NewsId=SKS-Micronfinance-IPO-get…

MicroCapital Universe Profile: SKS Microfinance:https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=SKS…

MICROCAPITAL BRIEF: SKS Microfinance, a Microfinance Institution (MFI) in India, Announces Intentions to Sell Shares From July 28 to July 30, July 13, 2010:https://www.microcapital.org/microcapital-brief-sks-microfinance-a-microf…

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-ri…

MICROCAPITAL BRIEF: India’s SKS Microfinance IPO Could Trigger Trend in Microlending, June 16, 2010:https://www.microcapital.org/microcapital-brief-indias-sks-microfinance-i…

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-i…

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-microf…

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…

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