SKS Trusts becomes single-largest shareholder in SKS Microfinance

Vikram Akula sells almost his entire stake in the firm

SKS Trusts has become the single largest shareholder in India’s only listed microlender SKS Microfinance. It has increased its stake in the microfinance company to 12.6 per cent, according to people familiar with the development.

SKS Trusts comprises five mutual benefit trusts whose beneficiaries are self-help groups of borrowers of SKS Microfinance. The sole trustee of SKS Trusts is SKS Trust Advisors. According to data available with stock exchanges, SKS Trusts on Tuesday bought close to one million shares of SKS Microfinance (representing a 0.84 per cent stake in the company) for Rs 13.4 crore.

“We believe the stock of SKS Microfinance at current prices offers a good investment value to the trust from a long-term perspective. The investment is in line with the objectives of the trusts and is fully compliant with all regulations. With today’s investments, SKS Trusts, the original promoter, will become the largest shareholder of SKS Microfinance,” Biksham Gujja, director of the trustee of SKS Trusts, said in a statement.

The statement did not offer further details. However, sources said the move would strengthen SKS Trusts’ longstanding demand for a board seat in the microfinance company.

SKS Microfinance declined to comment on this development.

Meanwhile, SKS Microfinance’s founder Vikram Akula, who left the microlender in 2011, is believed to have sold his entire stake in the company. Akula was holding close to 900,000 shares at the end of June 2013. Stock exchange data showed he sold almost an equal number of shares for Rs 12 crore. This will probably help Akula, at least partially, in arranging initial capital for his new venture.

Akula had said he would be involved in a mobile banking initiative that would create an improved platform for the microfinance business. He was not immediately available for comments.

Sequoia Capital India Growth Investments, which owned a 3.8 per cent stake in SKS Microfinance, also sold 1.39 per cent stake for Rs 19.8 crore.

Shares of SKS Microfinance on Tuesday ended at Rs 132.30 on BSE, up 12 per cent from the previous close even as the benchmark Sensex fell 651 points, or 3.45 per cent, to close at 18,234.66 points.