SKS Microfinance jumps after MUDRA sanctions refinance line at lower rate

SKS Microfinance jumped 6.46% to Rs 426 at 15:30 IST on BSE after the company's announcement that MUDRA sanctioned Rs 100 crore refinance line at a lower rate of 10% per annum to the company.

The company made announcement before market hours today, 28 October 2015.

Meanwhile, the BSE Sensex was down 202.50 points, or 0.74%, to 27,050.94.

On BSE, so far 6.55 lakh shares were traded in the counter, compared with an average volume of 3.84 lakh shares in the past one quarter.

The stock hit a high of Rs 428.40 and a low of Rs 402.20. The stock hit a 52-week high of Rs 589.50 on 31 July 2015. The stock hit a 52-week low of Rs 309.60 on 30 October 2014.

SKS Microfinance said that MUDRA (Micro Units Development & Refinance Agency) has sanctioned a refinance line of Rs 100 crore at 10% per annum to SKS Microfinance. MUDRA was launched by the Government of India for financing micro entrepreneurs engaged in small business activities like manufacturing, processing, service sector and trade.

This is the first refinance limit sanctioned to SKS Microfinance by MUDRA. The development is expected to contribute to bringing down the cost of interest-bearing liabilities at SKS Microfinance. Earlier, with the cost of its interest-bearing liabilities dropping to 11.9% in Q1 June 2015 from 13.6% in the year ended 31 March 2015 (FY 2015) on account of downward adjustments in risk premium, the company could reduce the interest rate charged to borrowers on three occasions since October 2014. With an overall reduction of 3.8% since October 2014, SKS Microfinance charges 20.75% on all its disbursements with effect from 1 October 2015.

SKS Microfinance's net profit rose 37.2% to Rs 77.86 crore on 61.3% rise in total income to Rs 324.29 crore in Q2 September 2015 over Q2 September 2014.

SKS Microfinance is among the largest microfinance companies in India. The company's mission is to provide financial services to the economically weaker sections.

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