SKS IPO to raise up to Rs 1,200 cr

Country's largest micro finance firm, SKS Microfinance, is likely to hit the capital market by next month with its initial public offer (IPO) to raise between Rs 1,000 crore and Rs 1,200 crore to meet its expansion plans.

Founded by Vikram Akula, SKS Microfinance has a total outstanding of Rs 3,208 crore as on September-end 2009 and a customer-base of around 53 lakh. Venture capital firm Sequoia is the largest shareholder in the firm while other major stakeholders include Kismat Capital, Mutual Benefit Trust and Sandstone among others.

The company has filed DRHP with market regulator Sebi and is waiting for its approval.

"In order to reach about 50 lakh clients, you need a larger pool of capital. We have been tapping various sources at different levels of our growth...That being the trajectory, IPO is the best way to raise money to grow in the space," SKS Microfinance Founder and Chairperson Vikram Akula told PTI.

It is for the first time that a micro finance firm is tapping the country's capital market. The company plans to offer a total of 1.6 crore shares to public, out of which about 50-lakh shares will be allocated to retail investors.

The promoters will dilute 21.6 per cent of shares through the issue. Post-issue, the holding of Sequoia Capital in the company will come down to around 16 per cent from the current 24 per cent and that of Kismat Capital to 12.9 per cent from 17.9 per cent.