SKS Microfinance rallies on heavy volumes

SKS Microfinance has rallied over 11% at Rs 196 on back of heavy volumes on the bourses.

The stock opened at Rs 179 and touched high of Rs 199 on the NSE. A combined 2.03 million shares have already changed hands on the counter till 1205 hours as against an average sub one million shares that were traded daily in past two weeks on the NSE and BSE.

According to Business Standard reports, loans by microfinance institutions (MFIs) might become cheaper from April as fallout of changes in debt pricing norms by the Reserve Bank of India (RBI).

 

RBI has said the interest charged by non-banking finance companies (NBFCs) working as MFIs will be the lower of the cost of funds plus margins and the average base rate of the five largest commercial banks by assets multiplied by 2.75.

 

The new norm takes effect from April 1. RBI will announce the applicable average base rate on March 31 and every quarter-end thereafter.

Meanwhile, SKS Microfinance is planning to raise up to Rs 4,500 crore to meet its lending requirements during the next financial year, including Rs 400 crore though diluting maximum 20% stake though the qualified institutional placement (QIP) route.

The board of directors of the micro finance firm at their meeting held on February 4, 2014 approved the business plan for FY15 and FY16.

Meanwhile, for the quarter ended December, SKS reported nearly 19-fold jump in net profit to Rs 21.4 crore after business outside Andhra Pradesh increased.

Total income of the company rose to Rs 133 crore during the quarter from Rs 85 crore in the year-ago period. The company had guided a net profit of Rs 125 crore for the fiscal ending March 2015.