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SKS Trust divests remaining stake in SKS Microfinance for $27.8M

Biksham Gujja-led SKS Trust Advisors Private Limited has sold its remaining stake holding in India’s lone listed micro-lender SKS Microfinance Limited, by selling a little over 4 per cent equity stake in the company for around Rs 171 crore ($27.8 million) through open market transactions.

In May it had sold majority of its holding in SKS Microfinance for Rs 182 crore ($30.5 million).

SKS Trust, the sole trustee of five mutual benefit trusts (MBT) whose beneficiaries are self-help group borrowers of SKS Microfinance, is the original promoter and shareholder of the micro-lender. The company's Mutual Benefit Trusts include SKS Mutual Benefit Trust Medak, Sangareddy, Jogipet, Narayankhed and Sadasivapet.

The five associated entities of SKS Trust sold off a total of 5.2 million shares on Monday. Shares were sold at a price of Rs 325 each against price ranging Rs 220-225 per share in May.

Shares of SKS Microfinance shot up to close at Rs 351.25 a unit, up 7.8 per cent on the BSE in a flat Mumbai market on Monday.

The shares were acquired by some foreign financial institutions.

SKS Trust was founded by former SKS chief Vikram Akula. In late 2011, Akula quit SKS Microfinance over differences with the firm’s board but was reportedly keen on getting back on board of the company with the backing of the five trusts.

However, early this year SKS Microfinance informed that its founder and former chief Akula as also a set of mutual benefit trusts are no longer classified as promoters of the firm as they do not have any special rights or management control.

SKS Microfinance was founded by Akula in 1997 and was converted into a non-banking financial company in 2005. Akula left the company after difference with the management and the board in 2011.

SKS Trust recently said it has acquired 70 per cent stake in Outreach Financial Services India (OFS India), a Hyderabad-based financial services startup promoted by former employees of SKS Microfinance.

SKS Microfinance, which is backed by PE firm WestBridge, raised Rs 400 crore through a qualified institutional placement a few months back. This was its second such institutional fundraising in the last two years.

(Edited by Joby Puthuparampil Johnson)

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