India’s lone-listed micro lender SKS Microfinance Limited has raised Rs 400 crore though a sale of 17.7 million equity shares to qualified institutional investors, according to a stock market disclosure.
This is the first equity market issue to sail through after the general elections in the country and the single largest capital raise in the microfinance sector since SKS Microfinance’s IPO in August 2010.
S Dilli Raj, president, SKS Microfinance Limited, said, "The overwhelming response to our QIP endorses investors’ confidence in SKS Microfinance Limited's turnaround and the improved business prospects for the MFI sector. This is a market opening transaction, and we are delighted that the first issuance post the election of the new central government is from an inclusive sector like microfinance."
The QIP issue, which was launched on May 19 and closed on Thursday, was oversubscribed multiple times, SKS Microfinance said. The QIP had a floor price of Rs 235 per share and issue price of Rs 225 per share.
The proceeds raised from the QIP will be utilised to meet the capital requirements of company for next three years, it added.
“The QIP will enable us to augment our member base from the present 4 million to 8.5 million over the next three years, and meet their credit requirements. This growth capital will help us fund our stable growth plans,” M R Rao, managing director and CEO, SKS Microfinance said.
As on March 31, 2014, the net-worth of the company was Rs 459 crore, which is expected to cross around Rs 850 crore, post the QIP.
The firm, once India’s largest microfinance firm, counts WestBridge Capital As its single largest shareholder.
During the fourth quarter ended on March 31, 2014, SKS Microfinance posted an increase of 904.1 per cent its net profit to Rs 27.11 crore over the same period previous fiscal, on 44.5 per cent growth in total income to Rs 147.38 crore in the quarter over same quarter last fiscal.
Shares of the company closed the day at Rs 272.05 per share on Friday, down 3.73 per cent from its previous close on BSE in strong Mumbai market.
SKS Microfinance had previously raised Rs 230 crore ($42 million back then) in a QIP two years ago. This was the first tranche of a much larger fundraising plan announced in 2011. That time the shares were issued at Rs 75.40 apiece. The issue size was Rs 165 crore ($30 million), but was oversubscribed.
SKS Microfinance operates across 16 states, including Karnataka, Maharashtra, Odisha, Madhya Pradesh, Bihar, Uttar Pradesh, Rajasthan, Uttarakhand, Haryana, West Bengal, Jharkhand, Chhattisgarh, Kerala, Punjab and Delhi.
Credit Suisse acted as global coordinator and book running lead manager to the QIP. Kotak Mahindra Capital Company Limited and Espirito Santo Securities India Private Limited acted as book running lead managers. YES Bank and Unitus Capital acted as advisers.