SKS raises Rs 263 crore via QIP, preferential allotment

HYDERABAD: Beleaguered Hyderabad-based microfinance player SKS Microfinance said it had successfully raised Rs 263.5 crore through an oversubscribed qualified institutional placement (QIP) issue as well as a preferential allotment to one of the promoters.
The company said its QIP of around Rs 165 crore had been oversubscribed, with the company receiving applications worth around Rs 230 crore, making it the largest capital raise in the microfinance sector after its big ticket IPO in August 2010 when it had raised over Rs 1650 crore.The joint global coordinators and book runners to the QIP, which opened on July 12 at a price of Rs 75.4 a share and closed on July 17, were Credit Suisse Securities India and Yes Bank Ltd.
The company had also raised Rs 33.50 crore last week through a preferential allotment of 44.5 lakh shares at Rs 75.4 a share to Kumaon Investment Holdings, a wholly owned arm of one of its promoters WestBridge Ventures II LLC.
With this, SKS' reported networth of Rs 435 crore as of March 31, 2012 had gone up to Rs 700 crore, the company said.
According to SKS Microfinance CFO S Dilli Raj, while the response to the QIP had validated the relevance of microfinance for financial inclusion in India, the total fund raise of Rs 263.50 crore had brought in the much needed capital. "This capital raise reinforces the confidence reposed in us by our credit grantors and exponentially enhances our debt fund-raising ability," Raj said.
"This (the QIP) will help us strengthen our leadership position and improves the sector prospects. Most importantly the QIP equips us to meet the credit requirements of our 4 million rural borrowers who have been waiting for some time now," said SKS Microfinance managing director and CEO M R Rao.