SKS Microfinance IPO begins subscription

Microfinance Focus, July 28, 2010: Setting precedent for the Indian microfinance industry, SKS Microfinance Ltd. opens up subscription of its Initial Public Offering (IPO) today. The company’s 16,791,579 equity shares will be issued at a price band of Rs. 850-Rs. 985 per equity share. Citi, Credit Suisse and Kotak Mahindra are the book-running lead managers for the offering.

Out of the 16.792 million shares, 44.3% are new and 55.7% will be sold by existing shareholders. Of the total, 60% will be offered to QIBs, including the anchor investors, 30% to retail investors and 10% to non-institutional investors, primarily high-net-worth individuals. A discount of Rs 50 per equity share is being offered to applicants in the retail category.

Under Anchor Investors (AIs) portion in the Public Issue of SKS Microfinance Limited; 30, 22, 484 equity shares have been subscribed by 36 Anchor investors at Rs.985/- per equity share. It had secured about Rupees 3 billion by allocating shares to anchor investors. Abu Dhabi Investment Authority, J.P. Morgan, Morgan Stanley, Birla Sun Life, Sundaram BNP Paribas, ICICI Prudential Life Insurance Company and Reliance Capital are some of the anchor investors.

SKS Microfinance Ltd is India’s largest microfinance institution. The value of its loan outstanding has grown at a compound annual growth rate of 147.7% to Rs29.4 billion ($629 million) from Rs780.5 million in fiscal 2010. Its net profit has also expanded at a CAGR of 221% in the same period to Rs1.7 billion in fiscal 2010, based on a revenue of Rs9.6 billion.

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