The Hindu : Business : SKS Microfinance public offering oversubscribed 13.6 times

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Tuesday, Aug 03, 2010
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SKS Microfinance public offering oversubscribed 13.6 times

The firm will use the proceeds to meet its future capital needs

NEW DELHI: SKS Microfinance's Rs.1,654-crore public issue, the first such issue by any microfinance firm in Asia, received massive response from investors with the issue getting oversubscribed a massive 13.64 times at the end of the offer on Monday.

Investors from all categories — retail, institutional and corporates — lapped up the issue, generating demands for up to Rs.18,502 crore. The offer got total bids for over 18 crore shares against 1.37 crore equities on offer for the public, as per the latest NSE data.

Based on the upper-end of the price band of Rs.985 per share, the issue generated a demand of over Rs.18,000 crore at the end of the final day on Monday.

In the portion reserved for the qualified institutional buyers, the issue was subscribed 20.38 times, as per the NSE data. In the HNI (high net worth individual) category, the issue got demand for 18.26 times, while for the retail portion the demand was 2.75 times, banking sources told PTI.

Aiming to raise Rs.1,654 crore, the Hyderabad-based firm entered the capital market with an IPO of 1.6 crore shares in the price range of Rs.850-985 a share. The issue closed on July 30 for institutional buyers. Monday was the last day for retail and HNIs. The country's largest microfinance firm will use the IPO proceeds to meet its future capital needs.

Founded by Vikram Akula, SKS Microfinance has a customer base of around 53 lakh. The non-banking firm is backed by several big private equity players, including Sequoia Capital.

Catamaran Management Services, a fund run by Infosys co- founder and chief mentor N. R. Narayana Murthy, has also made an investment in the firm. It was first such investment by Catamaran.

The offering will constitute around 21.6 per cent of the fully diluted post-issue paid-up capital of the firm. The promoters stake will come down to 37.1 per cent from 55.8 per cent after the IPO.

Citigroup Global Markets, Credit Suisse and Kotak Mahindra are the book-running lead-managers to the issue. — PTI

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