Tepid retail response to SKS Microfinance IPO

Microfinance Focus, Aug 2, 2010: SKS public offer which received an overwhelming draw from qualified institutional buyers, couldn’t manage to attract the interest of retail individual investors as the issue remains undersubscribed 0.23 times in the portion reserved for them, according to the latest data available at Bombay Stock Exchange (BSE) at 12.05 PM today.

On the National Stock exchange also the response remained weak. It was subscribed just 0.16 times till the end of the third day in the category of retail individual investors. The total demand for the issue however remains healthy and it received a bid for 2, 66, 82, 936 shares against the offer of 1, 37, 69, 095 shares, taking subscription to 1.93 times at BSE till today noon.

For qualified institutional investors, the issue closed on 30^th July but it remains open till today for retail investors. A discount of Rs 50 per equity share is being offered to applicants in the retail category.

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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