SKS Microfinance has filed the Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for an initial public offer (IPO) of 1.67 crore equity shares, accounting for 21.6% of the company’s fully diluted post-issue capital. This includes a fresh issue of 0.74 crore shares and an offer for sale of 0.93 crore shares by certain selling shareholders.
Net proceeds from the fresh issue would be used to augment the future capital requirements of the company arising out of growth in its business.
The book running lead managers to the issue are Kotak Mahindra Capital, Citigroup Global Markets India and Credit Suisse Securities (India).
SKS is the first microfinance company to hit the market following RBI directive asking microfinance companies to maintain higher prudential capital of 12% of their assets in FY11.
Popularity: 8% [?]
{ 1 comment… read it below or add one }
SKS Micro Finance earned profit before tax of Rs 267.70 crore on the total income of Rs 958.92cr for the FY 2010. The basic is EPS of Rs 33, much more than some of the large software companies. The country’s largest micro financier is exploiting the poorest of the poor in rural India in the name of providing credit access to them. The company charges interest between 27% -36% p.a. on money lent to the poor. On the one hand, the company says, that there is no scope for reducing the interest; on the other hand, the company is posting robust profits year after year. The so-called valuations they are trying to create for the company is to serve for their own selfish motives. That will benefit the handful of shareholders / promoters.
Nobel laureate Muhammad Yunus, speaking at the Fairmont Hotel, USA, on May 24, said he is increasingly wary of the direction the booming micro finance industry is taking.
“I get very worried when investment funds come to microfinance,” said the founder of Bangladesh’s Grameen Bank, which pioneered the industry by giving small loans to rural women to start their own businesses. “I don’t want to excite businessmen that there is profit to be made here,” he said.