SKS Microfinance attracts 10.5% premium on debut

Settles at Rs 1,088.58 on BSE

Shares of Hyderabad-based microfinance firm SKS Microfinance ended at Rs 1,088.58 on BSE, a 10.52% premium over the initial public offering price of Rs 985.



The stock debuted at Rs 1,036, a 5.18% premium over the initial public offering (IPO) price. The stock hit a high of Rs 1,159.90 and low of Rs 1,036.

On BSE, 68.29 lakh shares were traded on the counter.

The company had priced its initial public offering (IPO) at Rs 985 per share, at the top end of the Rs 850-985 per share price band. A discount of Rs 50 per share was offered to retail investors.

The IPO of SKS Microfinance was subscribed 13.69 time and had garnered bids for 18.85 crore shares. The qualified institutional bidders (QIBs) had made a beeline for the IPO with the portion reserved for them getting subscribed 20.38 times. Bids were put in for 14.37 crore shares as against 70.52 lakh shares reversed for QIBs. Within the QIB category, foreign institutional investors (FIIs) put in bids for 10.67 crore shares

Domestic institutional investors (DIIs), other than mutual funds put in bids for 3.08 crore shares. Mutual funds put in bids for 61.30 lakh shares.

The category reserved for non-institutional investors (NIIs) was oversubscribed 18.26 times, while that for retail individual investors (RIIs) was oversubscribed 2.81 times.

SKS Microfinance intends to utilize the net proceeds of the IPO to augment its capital base to meet its future capital requirements arising out of growth in the business.

On 28 July 2010, SKS Microfinance raised Rs 298 crore from 36 anchor investors. The company has finalized the allotment of about 30.20 lakh shares to anchor investors at Rs 985 per share -- the top end of the Rs 850-985 price band for its IPO.

SKS Microfinance is India's largest microfinance company in terms of total value of loans outstanding, number of borrowers and number of branches. It is engaged in providing microfinance services to individuals from poor segments of rural India.

Gross revenue of the SKS Microfinance grew at a CAGR of 176% in last 4 years ended March 2010 while net profit rose at a CAGR of 223% over the same period.