We'll welcome probe into share fall: SKS Microfinance

SKS Microfinance today said it will welcome any enquiry from Sebi to probe the issues leading to a fall in its share price, while asserting that it has not heard anything so far from the regulator or the bourses.

The statement came in the midst of a sustained fall in shares of the country's only listed microfinance company for the second straight day.

A 20% fall in SKS Microfinance's share price on Friday last week, hours ahead of the company's fourth quarter results and after reports of its target share price being cut by more than half in an equity research report, is said to have come under the market regulatory authorities' surveillance lens.

The shares fell further today and were trading 16.5% down at Rs 277.20 at 12:30pm, after hitting their lowest-ever level of Rs 273.20 apiece on the NSE.

Commenting on reports of a possible Sebi probe into the sharp fall in SKS Microfinance stock, a company spokesperson said in a statement: "The company wishes to reiterate that it has not heard anything from either Sebi or the exchanges in this matter."

The company, however, added that "an analyst report was released and flashed by the media prior to the board meeting to announce earnings on May 6 (where the company was unable to respond due to the earning announcement)."

Asserting that it has not heard anything so far from Sebi or the stock exchanges about any probe, the company said: "SKS Microfinance Limited would welcome any enquiry by the regulator to investigate the circumstances leading to the fall in the share price."

The 20% fall on Friday was coupled with about a 10-fold surge in the stock's trading volumes, prompting the bourses and market regulator Sebi to consider a probe.

Sources had said the surge in trading volumes and a heavy fall in the shares on a day when the company announced a loss after market hours was being viewed as an unusual event to the market surveillance authorities and accordingly, they have begun a preliminary probe.

The matter is being probed for a possible breach of insider trading rules or hammering by a bear cartel, sources added.

The fall coincided with a strong upward trend in the market, when the BSE Sensex rose by over 300 points, and happened a couple of days after the RBI said that bank loans to microfinance lenders would be categorised as priority sector lending.

The stock witnessed heavy trading volumes today as well, with a total traded quantity of more than three times what was seen on Friday by early afternoon at the two exchanges.