FII holding in SKS Microfinance soars to 36%

Going bullish on the country's only listed microfinance company, foreign investors have more than doubled their holding in SKS Microfinance to nearly 36% over the past financial year with purchase of shares worth an estimated Rs 380 crore.

Foreign Institutional Investors (FIIs), which held 13.41% stake in Hyderabad-based microfinance player at the end of financial year 2011-12, raised their exposure to 35.94% as on March 31, 2013, as per the latest shareholding data available with the stock exchanges.

Taking into account the average market value of SKS shares, 22.53 percentage point rise in FII holding in the company would be equivalent to purchase of shares worth about Rs 380 crore.

FII holding in SKS had gone up consistently during the last three quarters, after hitting a record low level of 8.33% during April-June quarter 2012.

However, the total promoter holding dropped to 26.03% in January-March quarter 2013 from 36.84% in the three months ended March 31, 2012.

Shares of SKS have surged by 7% during the financial year 2012-13. The stock had taken a major beating for months together after its listing in August 2010 at a price of over Rs 1,000 per share.

Despite a revival over the past year, the shares are currently trading near Rs 31 per share. The company had sold shares in its initial public offer at a price of Rs 985 apiece.

During January--March 2012, FII pared its holding in the company marginally -- from 14.72% to 13.41% and fell to a record low of 8.30% in the April--June quarter.

However, foreign investors stake climbed to 31.77% cent in the July--September quarter, and rose further to 32.81% as on December 31, 2012.

SKS posted a net profit of Rs 1.2 crore in the December quarter after posting seven successive quarters of losses, as the company embarked on a multi-pronged turnaround strategy. The company's operations had got affected after Andhra Pradesh came up with regulations in October 2010 restricting lending and recovery.

The company had completed 12 securitisation transactions with seven funding partners aggregating to Rs 1,207 crore during 2012-13. These transactions helped SKS fund around 1.6 million micro loans extended to borrowers belonging to economically weaker sections.