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Monday, July 26, 2010

SKS Microfinance IPO Information

Checkout IPO information of SKS MICROFINANCE and whether you should buy IPO of the company. A public offering of 16,791,579 equity shares of SKS Microfinance will open on July 28, 2010.

IPO Information:
Issue Open: July 28, 2010
Issue close: July 30, 2010
Price Band: Rs. 850 - Rs. 985 Per Equity Share
Minimum Bid Size: 7 Equity Shares
Face Value: Rs. 10 Per Equity Share
Issue Type: 100% book building
Maximum Subscription Amount for Retail Investor: Rs. 100000

Incorporated in 2003, SKS Microfinance Ltd is the largest MFI in India in terms of total value of loans outstanding, number of borrowers, who they call members, and number of branches, according to the October 2009 CRISIL report titled India Top 50 Microfinance Institutions, or the CRISIL Research report.

SKS Microfinance is a non-banking finance company, or NBFC, registered with and regulated by the Reserve Bank of India, or RBI. They are engaged in providing microfinance services to individuals from poor segments of rural India.

The public offering is going to constitute 21.6% of the fully diluted post issue paid-up capital of the company. The issue would close on July 30, 2010 for QIBs and on August 2, 2010 for retail and non-institutional applicants.

IPO Grading / Rating:
CARE has assigned an IPO Grade 4 to SKS Microfinance Ltd IPO. This means as per CARE company has 'Above Average Fundamentals'.

SKS Micro Finance earned a profit before tax of Rs 267.70 crore on its total income of Rs 958.92cr for the FY 2010. The basic Earnings Per Share(EPS) of the company is Rs 33 as per the financial information provided by it. P/E ratio stands at 25.75 at lower band and 29.84 at upper price band. This looks reasonable looking at higher P/E ratios of other NBFC's in market like Reliance capital and Bajaj finserv. One may buy IPO for some listing gains and good returns in mid term.

Sequoia Capital India selling stocks
At the upper end of the price band, Sequoia Capital India II LLC will be selling 9,346,256 equity shares (part of it's holding) with returns of over 16x in its three year old investment. It has invested through two funds SCI II Llc and SCIGI I with average cost of purchase pegged at Rs 61.18 and Rs 137.53 per share, respectively. SCI II is a part of the group of shareholders who have together offered to sell a part of their holding in the IPO.

1 comment:

  1. Micro-Finance to Face Slow Painful Death. SKS Share to enter Free Fall. Sell, Sell, Sell!

    SKS, the Indian micro-finance giant’s IPO was supposed to signal the coming of age of the micro-finance (MF). Instead, it contained the seed for the destruction of the entire industry. Their Rs 10 share on listing attracted a premium of Rs 975 and such was the investor confidence, it touched a high of Rs 1,490 in a matter of days. Then hell broke loose with the industry hit by charges of them profiteering and causing farmer suicides. Its reverberations were so strong that it had been felt by the industry all over the world. The stock plunged to Rs 890 before recovering to be a tad over its listing price and hovering around this range for the last one week. We expose the dark underbelly of a Frankenstein unleashed by NGOs.

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