Posts Tagged ‘sks’
Posted on March 10, 2010 - by James
India: SKS to file for IPO in 3-4 weeks…
MUMBAI, March 8 (Reuters) – SKS Microfinance, an Indian firm that makes small loans to poor borrowers, plans to file application papers for an IPO in 3-4 weeks, three sources with knowledge of the deal said. The exact size and structure of the fundraising was not yet determined, with one source putting the figure at roughly $200 million, some of which might be raised through a pre-IPO placement. Another source said the company could raise $250-$350 million.
The sources did not wish to be named as they were not authorised to speak with the media. SKS founder Vikram Akula declined to comment. The for-profit company is India’s largest microfinance institution and is backed by private-equity firms such as Sequoia Capital, Kismet Capital and Sandstone Capital.
Posted on December 22, 2009 - by James
India: SKS Microfinance ties up with State Bank of India…
SKS Microfinance has tied up with State Bank of India and two of its group banks for integration of 600 of its branch accounts with them.
“This is an innovation on the liability side we are offering to our customers. It will facilitate last mile cash-dealing,” Mr Dilli Raj, Chief Financial Officer, SKS Microfinance, told Business Line here.
As a part of the agreement, the Hyderabad-based microfinance institution would integrate its accounts in 390 branches with State Bank of India, 150 with State Bank of Hyderabad and 60 with State Bank of Mysore.
SKS had earlier tied up with Axis Bank, HDFC Bank (NYSE:HDB) and ICICI Bank (NYSE:IBN) for a similar facility.
“In addition, State Bank of India is also giving us Rs 100 crore funds as a mix of term loan and cash credit. This is significant because it shows the willingness of public sector banks to be associated with MFIs which was not happening earlier,” he said.
SKS, which has an outstanding portfolio of Rs 3,628 crore as on November 30, 2009, now had 36 per cent of its credit sources coming from 17 public sector banks.
CAPITAL
On the need for further capital, Mr Raj said evaluation of all possible options in debt and equity (including IPO) was being examined.
SKS has been aggressive on securitization of its agri/weaker section portfolio with banks. “Before March 31, 2010, we will be doing Rs 1200 crore through this route as the funds would be cheaper by 200 to 250 basis points than the term loans (at about 8.25 per cent), he said.
So far, it had tied up with ICICI Bank, HDFC Bank, Axis Bank, Kotak Mahindra, Punjab National Bank and Yes Bank (OOTC:YESBF) in this regard.
The benefit in the cost of funds would eventually be passed on to the 5.7 million customers SKS currently had, the CFO said.
“In fact, we have reduced our lending rates in Orissa, Karnataka and Andhra from 15 per cent (flat) to 12.5 per cent recently,” Mr Raj said.
SKS, which had ‘pioneered’ securitization of portfolio in MFI sector, had also tied up with Religare for commercial papers worth Rs 25 crore.
“This is the first standalone debt paper from a Mutual Fund to MFI,” Mr Raj said.
SKS, which has over 19,000 employees on its rolls, is now currently adding 1000 new employees every month to its field force for expanding its reach, he added.
Source: http://www.istockanalyst.com/article/viewiStockNews/articleid/3730342
Posted on June 17, 2009 - by Gavin
Standard Chartered India Completes Two Of The Largest Debt Capital Market Deals For Microfinance Institutions In India…
Standard Chartered
Hyderabad/Mumbai: Standard Chartered Bank India completed two landmark deals for Microfinance Institutions in the period April – June 2009 with two of the largest Microfinance institutions in the country – SKS Microfinance & Spandana Sphoorty Financial Ltd.
In April 2009, Standard Chartered and SKS Microfinance, India’s largest and the world’s fastest growing microfinance company completed a unique transaction in the debt capital markets by enabling the country’s first listed Non Convertible Debenture (NCD) Issue by a microfinance institution. SKS Microfinance raised INR. 750 mn (USD15mn) through an issue of 1-year NCD at a coupon rate of 10 percent. The NCDs have been listed on Bombay Stock Exchange Limited (BSE).
This was followed by another significant transaction in the debt capital market space – Spandana Sphoorty Financial Ltd., India’s second largest microfinance company with more than 2.5 million clients spread over nine states raised INR 800mn (USD17mn) through an issue of 1-year listed NCD with an yield to maturity of 10 percent. Again these NCDs have been listed on Bombay Stock Exchange Limited (BSE).
Standard Chartered India is the sole book runner and lead arranger for both the Issues
Commenting on the impact of the transaction on SKS and the sector, Suresh Gurumani, MD & CEO of SKS Microfinance, said “This transaction enables us to diversify the sources base and access capital market funding. By listing the NCDs on the stock exchange, SKS raises the bar on transparency and governance standards for the sector as a whole “. (more…)
Posted on March 24, 2009 - by Gavin
SKS looking to raise Rs 500 cr via rated bonds…
Business Standard
As a part of its Rs 5,000-crore incremental borrowing plan for the next financial year, Hyderabad-based SKS Microfinance is planning to raise Rs 500 crore through rated bonds. It has also firmed up plans to raise Rs 25 crore through issuance of commercial papers (CPs) this year.
SKS will be the first non-banking finance company (NBFC) in the microfinance space to use CPs for fund-raising. It had recently raised Rs 25 crore through the issue of non-convertible debentures (NCDs), which was fully subscribed by Yes Bank. The bond had a tenure of one year and carried a coupon rate of 10.50 per cent. Additionally, SKS is planning to raise another Rs 25 crore through rated bonds this fiscal year.
During the current financial year ending March 31, SKS expects to disburse a total of Rs 4,500 crore, with a total outstanding portfolio of about Rs 2,500 crore. Next fiscal, it plans to disburse a total of Rs 8,750 crore, with an outstanding portfolio of Rs 5,000 crore, said S Dilli Raj, chief financial officer, SKS Microfinance. This year, the total incremental borrowing of SKS would be close to Rs 3,200 crore, with major contribution from banks, he added. (more…)
Posted on March 17, 2009 - by Gavin
More MFIs securitising loans to raise funds…
The Hindu Business
Mumbai, Micro finance institutions are increasingly looking at the securitisation route to cut borrowing costs and to free up capital. For investors, the asset pools are safe as they are backed by cash flows, thanks to the high recovery ratio of MFIs.
Besides, with rating agencies now rating these structured instruments, the trend is really catching on, said experts.
In a securitisation deal, pools of assets such as auto loans, personal and construction loans are pooled together and hived into special investment vehicles, which are bought by investors.
Rating agency Crisil, which recently rated and securitised India’s first micro finance loan receivables, backed up Equitas Micro Finance, is ready with one more rating, said Mr Raman Uberoi, Senior Director, Crisil. “As MFIs grow they need to look at alternate sources of funding. For the better MFIs, with strong asset quality, no high delinquencies and a strong underlying cash flow, the loans are pretty amenable to being structured and sold. It enables them to tap sources beyond bank lending and equity, which is what we have seen so far,” he said.
According to Mr Dilli Raj, Chief Financial Officer, SKS Microfinance, securitisation is a win-win situation for both MFIs and assignees (banks) or investors (mutual funds). (more…)
Posted on March 16, 2009 - by Gavin
MICROCAPITAL STORY: Indian SKS Microfinance Issues Bonds and Commercial Notes, and Announces a $963.6m Borrowing Plan to Finance Rapid Growth…
Microcapital
Hyderabad-based SKS Microfinance announced that it aims to raise one-tenth of its USD 963.6 million borrowing plan for the next fiscal year through USD 96.4 million worth of securitization deals with financial institutions. The announcement was made shortly after SKS sold USD 4.8 million non-convertible debentures (NCD) with YES Bank and generated another USD 4.8 million through the issuance of commercial paper (CP). Last month, SKS solidified a USD 38.5 million securitization deal with India’s second largest bank, the Industrial Credit and Investment Corporation of India (ICICI). These deals come as SKS strives to finance a loan portfolio that is growing at one of the fastest rates among microfinance institutions (MFIs) in the world.
Indian YES Bank fully subscribed SKS’ USD 4.8 million issuance of non-convertible debentures (NCD). NCDs are issued for a fixed maturity, usually years after issuance. Unlike convertible debentures, no part of NCDs can be converted into equity. NCDs typically earn a higher interest rate than convertible debentures. The NCDs purchased by YES Bank will mature in one year and carry an annual interest rate of 10.5 percent. After SKS’ NCD deal with YES Bank, SKS Chief Executive Officer (CEO) Mr. Suresh Gurumani said, “SKS is the only MFI in the country to raise funds through non-Convertible Debenture.”
SKS also issued USD 4.8 million of commercial paper (CP). CP is a shorter-term fund raising strategy than NCDs, having tenure of between one and 270 days. CP is often used by corporations or banks to meet debt obligations. Promissory notes are sold at a rate discounted from the face value, with the agreement that the issuing bank or corporation will pay the face value on a fixed maturation date. Since the notes are not backed by any form of collateral, generally only institutions with very strong credit ratings are able to sell CPs at a reasonable rate. According to this Business Standard article, SKS is the first MFI to raise funds in this manner.
Posted on March 13, 2009 - by Gavin
MICROCAPITAL STORY: SKS Microfinance in India Plans to Launch Operations in China…
Microcapital
SKS Microfinance, the largest microfinance provider in India in terms of assets, is planning to launch operations in China, in a move to expand its reach beyond India. According to a press release on The Economic Times, SKS reckons this would be the ideal time to enter the Chinese market. The export driven Chinese economy has been impacted by the global meltdown and several vocationally-trained rural employees in China have lost jobs.
SKS plans to give credit to these unemployed groups in China and help them start their own ventures. In this regard, the release quoted the chief executive officer and managing director of SKS Microfinance, Mr. Suresh Gurumani as saying that SKS was looking to expand in China primarily because it was a ‘large country with a significant population that was poor’. Mr. Gurumani also stated that the expansion was a move to share SKS’ knowledge in the field of microfinance to benefit ‘a larger section of people’. SKS’ foray into China would make it the first overseas expansion for an Indian microfinance institution (MFI).
Subject to all regulatory approvals granted by both the governments, SKS plans to tie up with a China-based MFI to start operations in the country. As of now, no information on the Chinese MFI is publicly available. As per the release, SKS is currently evaluating regulatory issues that may have to be sorted out to set up a joint venture in China. Commenting on this, Mr. Gurumani said there were legal, compliance and cultural issues that SKS had to understand well before plunging into a detailed exercise. As of now, no timeframe has been set for the proposed venture. (more…)
Posted on February 19, 2009 - by Gavin
India: SKS Microfinance in Talks with Banks to Raise Rs 100 crore (USD 20 ml)…
Hyderabad, India, February 18, 2009 – SKS Microfinance, the largest player by assets in the country, is in talks with a clutch of state-owned banks to raise Rs 100 crore in a credit rated securitization deal. The move will help the MFI access cheaper funds and expand its business to new geographies.
“The credit rated securitization deal which would be the first of its kind in the microfinance space. An independent agency will rate the agency based on its credit history, financial position and future income”, claimed Dilli Raj, Chief Finance Officer, SKS.
Securitisation is the process of converting existing assets or future cash-flows into marketable securities. In this case, the loans are written in the books of the MFI and sold as future receivables to the bank. Normally, the MFI deposits the money collected from its clients (which are the receivables) in an escrow account and transfers it to the bank’s books. The bank discounts the future receivables at a negotiated interest rate. (more…)
Posted on December 1, 2008 - by James
Big microfinance firms taking over clients of smaller players
Posted on November 18, 2008 - by James
Vikram Akula to step down as CEO of SKS Microfinance
Vikram Akula, founder of SKS Microfinance (SKS ), has announced plans to step down from the role of CEO after 10 years. Mr. Akula says that this change will allow him to focus on a new initiative – microinsurance. As MicroCapital reported earlier this year, SKS partnered with Bajaj Allianz Life Insurance Company to offer insurance products toclients. This announcement comes amid rapid growth in the company. Suresh Gurumani, Director, Barclays Bank, will take over as SKS Microfinance’s CEO. An official transition date was not given… [click here to read the rest of this article...]
Posted on November 14, 2008 - by James
India: SKS Raises 75m USD in Fourth Round…
The round is led by Sandstone Capital, an India focused hedge fund, and is largest investment in an MFI.
In the largest microfinance deal in the world, Hyderabad based SKS Microfinance has raised Rs 366 crore or $75 million from private equity investors. This is fourth round of fund raising by SKS. Sandstone Capital, an India focused hedge fund with $1 billion capital under management, has led the deal, while the other investors in this round include SVB India Capital and Kismet Capital.
This is the largest investment in a micro finance institution anywhere in the world, said SKS Microfinance founder CEO Vikram Akula. Since October last year the MFI has raised Rs 563 crore in three rounds of funding.
“We are going to be using these funds to leverage access to commercial finance and scale of our outreach in next two years,” said Akula. SKS currently has 1,400 branches with 12,000 employees, and Akula plans to double that in the next two years. He also said that microfinance remains largely unaffected from the global economic meltdown… [click here to read the rest of this article...]
Posted on October 9, 2008 - by lincolnw
The Global Financial Crisis And Microfinance
As financial markets struggle internationally, some microfinance institutions (MFIs) have begun to see downstream effects in the form of rising lending rates. Royston Braganza, chief executive officer of Grameen Capital India observed “the demand for funds is high because microfinanciers have drawn up aggressive growth plans” and “the cost of funds remains a concern due to the 2 percent increase in just the last quarter.” These factors could make fundraising very difficult for microfinance institutions in cases where they have not built up proper reserves according to K. Vinod Kumar, Assistant Vice-President of member services at SKS Microfinance.
Despite these calls for concern, some key microfinance practitioners and advocates are publicly voicing their support for microfinance as a stable alternative investment. Muhammad Yunus of the Grameen Foundation said, “The financial crisis has not hit the microfinance system” and that “in the middle of all these bad news: microfinance still works.” Bill Clinton said last week that investors should “consider the poor of developing nations as viable investment alternatives to today’s turbulent markets.”… [click this link to read the rest of the article]
Posted on August 21, 2008 - by James
Grameen, IndusInd, SKS, come together in India…
BUSINESS STANDARD
Grameen, IndusInd, SKS, come together in India in $29milUS transfer
Press Trust Of India / Mumbai 2008
Three leading institutions, IndusInd Bank, Grameen Capital India and SKS Microfinance, today announced the closure…
The MiFi Report
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