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Sks Microfinance

In: Business and Management

Submitted By chaisa13
Words 6840
Pages 28
International Center for Business Research
Issue: Volume 2 – Apr 2013; Link: icbr.net/0204.37

Case Study Of SKS Microfinance Ltd.: India’s Lone Microfinance Company in the Stock Market
Devendra Prasad Pandey1 
1

MGCG University, Chitrakoot, Satna, MP, India

Abstract: Started as an NGO in 1988, SKS is today a for-profit NBFC regulated by the Reserve Bank of India. As of January 31, 2013 it has 48 lakh members associated with 1307 branches. It has disbursed 26195 crore as of September 2012. SKS Microfinance operates across 17 states in the country, including Andhra Pradesh, Karnataka, Maharashtra, Odisha, Madhya Pradesh, Bihar, Uttar Pradesh, Rajasthan, Uttaranchal, Haryana, West Bengal, Jharkhand, Chhattisgarh, Gujarat, Kerala, Punjab and Delhi. In August 2010, SKS completed an IPO that from the global financial perspective was a great success: it was 13 times oversubscribed, and the company's valuation reached the top of the offer band price (which initially listed the value of the company at $1.5 billion), and the share price rose 13% on its first day of trading and rose 29% within four weeks of the IPO. In the process, SKS raised $348 million in fresh capital that, in theory, was supposed to help further grow the business and allow SKS to serve more people with financial services and microcredit than it reached before the IPO. Shares of SKS Microfinance rose by over eight per cent in early trade, after the company reported a net profit of Rs 1.2 crore for the third quarter ended December, 2012. The company has earned profit after seven consecutive quarters of losses on account of rise in advances. The Company incurred a loss of Rs. 262 crore in Q2-FY13 and a loss of Rs 428 crore in Q3FY12. The paper describes the fund raising strategy, its present position in the stock market and consequences of internal conflict and impact of Andhra Pradesh crisis on...

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