SKS Microfinance gains after completing securitisation deal

SKS Microfinance rose 1.89% to Rs 174.80 at 10:20 IST on BSE after the company announced the second microfinance securitization during the current financial year of Rs 80.81 crore.

The announcement was made after market hours on Wednesday, 11 December 2013.

Meanwhile, the BSE Sensex was down 142.52 points, or 0.67%, to 21,028.89.

On BSE, so far 77,000 shares were traded in the counter, compared with an average volume of 2.65 lakh shares in the past one quarter.

The stock hit a high of Rs 176 and a low of Rs 172.75 so far during the day. The stock hit a 52-week high of Rs 198.90 on 13 December 2012. The stock hit a 52-week low of Rs 95.60 on 24 May 2013.

The stock had outperformed the market over the past one month till 11 December 2013, rising 15.33% compared with the Sensex's 3.32% rise. The scrip had also outperformed the market in past one quarter, gaining 23.06% as against Sensex's 5.87% rise.

The small-cap company has an equity capital of Rs 108.21 crore. Face value per share is Rs 10.

According to a press release issued by SKS Microfinance, the securitization deal involved downloading receivables from micro loans extended to 100,850 rural women entrepreneurs through a special purpose vehicle whose pass through certificates (PTCs) have been purchased by a major private sector bank.

The entire pool qualifies for priority sector treatment as per the Reserve Bank of India's (RBI) priority sector lending guidelines, the company said in a statement.

Notably, 30% of the pool is from scheduled caste and scheduled tribe entrepreneurs, 16% from minorities, 37% from backward caste and the remaining 17% from women belonging to the other castes. The entire pool comprises receivables from women entrepreneurs from weaker sections, the company added.

SKS Microfinance said that the pool is rated AA (SO) signifying 'high degree of safety regarding timely servicing of financial obligation' by one of the leading rating agencies. The pool is structured with geographical diversity as it comprises receivables from 12 non-Andhra Pradesh states and subjected to a minimum seasoning of three months, the company said in a statement.

SKS Microfinance reported net profit of Rs 16.34 crore in Q2 September 2013 as against net loss of Rs 262.15 crore in Q2 September 2012. Total income from operations rose 67.54% to Rs 129.95 crore in Q2 September 2013 over Q2 September 2012.

SKS Microfinance is a non banking financial company - micro finance institution (NBFC-MFI), registered and regulated by the RBI, whose mission is to provide financial services to low-income households. SKS operates across 15 states of India. They include: Andhra Pradesh, Karnataka, Maharashtra, Odisha, Madhya Pradesh, Bihar, Uttar Pradesh, Rajasthan, Uttaranchal, Haryana, West Bengal, Jharkhand, Chhattisgarh, Kerala and Punjab.

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