SKS to raise Rs 500 cr through QIP route

SKS Microfinance, the only listedmicro lender, on Wednesday said it would raise Rs 500 crore through qualifiedinstitutional placement (QIP) route in the current fiscal.

 

The company's board had given its approval for raising uptoRs 900 crore, a top official of the company said here.

Qualified institutional placement is private placement ofshares with institutional investors.

SKS to ready strategic plan in 6 months

SKS Microfinance MD and CEO MR Rao said it is facingproblems in West Bengal and Gujarat which resulted in a drop in collections inthose states.

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"We are planning to raise Rs 500 crore. The price ofthe issue will be decided at the time of issue. Before March we want tocomplete the issue. We are talking to the merchant bankers," Rao said.

SKS Microfinance scrip closed at Rs 112.95 today on BombayStock Exchange.

Replying to a query, Dilli Raj, CFO of SKS, said the netrisk exposure of the company on account of poor collection from Andhra Pradeshis Rs 337 crore and according to RBI Guidelines it has time till March 2012 todecide about the writing off the risk exposure.

Due to local and process-related issues, collections in WestBengal and Gujarat have dropped to about 86 per cent and 80.9 per centrespectively in the second quarter, Rao said.

Barring Andhra Pradesh, the average collection efficiencystood at nearly 97 per cent in the second quarter.

West Bengal is the third largest market after Andhra Pradeshand Karnataka for the Hyderabad-based company which operates in 18 States.

On projections, Raj said the company expects microfinanceportfolio outstandings of Rs 3,000 crore and revenues of Rs 900 crore by FY2013 with a net profit of Rs 50 crore.

 

The company reported revenues of Rs 308 crore for the firsthalf of the current fiscal, down by 55 per cent YoY.

 

Going forward, the company will adopt a strategy to ensurethat its net exposure of in state will not be more than 10 per cent of thetotal exposure, a company official said.

 

Rao said the company will invest Rs 15 crore over the nextthree years for strengthening customer grievance redressal and clientprotection programmes.

 

The company also plans to cap the return on assets of itsmicro-finance business at 3 per cent.

 

SKS Microfinance said it is also looking at expanding itsSangam stores, mobile handset loans and gold loans.