SKS Microfinance IPO got maximum bids from Institutional Investors

Microfinance Focus, July 29, 2010: Microfinance lender SKS’s initial public offering received the highest bidding from institutional investor and the issue got subscribed 18 percent on the opening day. Out of the total issue size of 1.37 crores of equity shares, SKS received bids for 25.33 lakh shares, according to the latest data available on the National Stock Exchange (NSE).

In the category reserved for Institutional Buyers, IPO was subscribed 34 percent. For non institutional investors it was subscribed 5 percent and for retail individual investors it was subscribed 2 percent.    

The company’s 16,791,579 equity shares were 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. A discount of Rs 50 per equity share is being offered to applicants in the retail category. The IPO closes on July 30 for institutional buyers and August 2 for retail and high networth individuals.

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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