SKS raises Rs 230 cr through its oversubscribed QIP issue

SKS Microfinance, the only listed microfinance company in the country, on Tuesday said its Rs 165-crore qualified institutional placement (QIP) issue was oversubscribed, with bids of about Rs 230 crore.

The QIP issue, launched with a floor price of Rs 75.4 on July 12, was closed on Tuesday. Credit Suisse Securities (India) and YES Bank were the joint global coordinators and book runners for the QIP.

In a press release, Chief Financial Officer S Dilli Raj stated, “The overwhelming response to our QIP validates the relevance of microfinance for financial inclusion in India. The QIP proceeds of Rs 230 crore and the proposed preferential allotment for Rs 33.50 crore, aggregating Rs 263.50 crore, bring in much-needed growth capital.”

PLACEMENT DATA

• First QIP in FY13 
• Largest capital raising in microfinance after SKS IPO in August 2010 
• QIP oversubscribed 
• Launched with issue size of Rs 165 
• Obtained bids for Rs 230 crore 
• Floor price Rs 75.4

After the QIP and the proposed preferential allotment, the net worth of the Hyderabad-based company would reportedly rise from Rs 435 crore to about Rs 700 crore.

Last week, the firm’s board had approved the preferential allotment of 4.45 million equity shares at Rs 75.40 a share to Kumaon Investment Holdings, a promoter of the company.

SKS Managing Director and chief executive M R Rao said the QIP would help the company strengthen its leadership position and improve prospects in the sector. “Most importantly, the QIP equips us to meet the credit requirements of our four million rural borrowers who have been waiting patiently for some time now,” he said.

After the enactment of the AP Microfinance Institutions (regulation of moneylending) Act in 2010, the company’s recovery and lending operations in Andhra Pradesh were drastically affected. Since then, the company, which operates in 18 states across the country, decided to focus more on operations in other states.