MUDRA sanctions Rs. 100 cr refinance to SKS Microfin; scrip zooms 5.52%

Micro Units Development and Refinance Agency Ltd (MUDRA) has sanctioned a refinance line of Rs. 100 crore for SKS Microfinance at 10 per cent interest per annum.

"This is the first refinance line availed by us,'' S Dilli Raj, President of SKS Microfinance said in a release issued here on Wednesday.

At a rate of 10 per cent, this was lower than the regular term loans from conventional lenders. ``We are already the lowest cost lender in MFI segment,'' he added.

The development is expected to bring down the cost of interest bearing liabilities for SKS, the only listed MFI in the country.

SKS scrip gained 5.52 per cent on the Bombay Stock Exchange after opening of the trade and was trading at Rs. 422.25.


Source : Thehindubusinessline

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SKS Microfinance cuts interest rate by 1.25%

SKS Microfinance has announced a 1.25 per cent reduction in the interest rate charged to borrowers from 22 per cent to 20.75 per cent with effect from October 1, 2015, for all future disbursals.

This is the third interest rate cut effected since October 2014.

In July 2015, the MFI had cut the lending rate by 1.55 per cent. In October 2014, it had reduced the rate by 1 per cent.

SKS Microfinance, in a statement, said it could reduce its cost of interest-bearing liabilities to 11.9 per cent in Q1FY16 from 13.6 per cent in FY14 on account of downward adjustments in risk premium.

"...Improved profitability in FY15 and Q1-FY16, capital raised in May 2014, a rating upgrade, and issuance of commercial papers and non-convertible debentures are the factors that drove the reduction in its cost of borrowing," it said.


Source : Thehindubusinessline

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SKS Microfinance cuts interest rate by 1.55%

SKS Microfinance Ltd on Thursday announced a 1.55 per cent reduction in the interest rate charged to the borrowers.

It cut the interest rate from 23.55 per cent to 22 per cent with effect from July 1, 2015. ``With the present reduction, SKS Microfinance charges the lowest rate among the Non-Banking Finance Company – Micro Finance Institutions.

(NBFC-MFIs) on its core income generating loans which are unsecured micro loans,’’ the company said in release issued here today.


Source : Thehindubusinessline

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SKS Microfinance completes securitisation worth Rs. 83 cr

SKS Microfinance Ltd has completed the fourth securitisation transaction in current financial year worth Rs. 83.32 crore.

With this, the total sum of securitisations completed during FY15 was Rs. 775.13 crore, the company informed Bombay Stock Exchange on Thursday.

The entire pool qualifies for priority sector treatment as per the Reserve Bank of India's priority sector lending guidelines.

The pool has been rated AA (SO) by a rating agency, signifying a `high degree of safety regarding timely servicing of financial obligations’, it added.


Source : Thehindubusinessline

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SKS Microfinance says Vikram Akula no more its promoter

SKS Microfinance said it will cease to treat a few entities, including Vikram Akula and Sequoia Capital India Growth Investments, as its promoters.

Mauritius Unitus Corporation and Mutual Benefit Trusts are the other entities that have been removed from the promoters list.

" ... taking cognisance of their (entities) requests and instructions, the company shall cease to treat them as its promoters with immediate effect," SKS Microfinance, the only listed microfinance company, said in a filing to the BSE.

The micro-lender said that Mauritius Unitus Corporation and Sequoia Capital India Growth Investments have entirely divested their shareholding in the company and do not currently hold any equity shares.

Akula was previously the executive chairman of the board of directors of the company. He resigned as a director of the company on November 23, 2011 and currently holds only 10 equity shares, the filing said, adding that he does not have any special rights in the company through formal or informal arrangements.

"Akula has informed the company through an e-mail dated April 24 2014, that he is not a promoter of the company," the filing said.

The company's Mutual Benefit Trusts include SKS Mutual Benefit Trust Medak, Sangareddy, Jogipet, Narayankhed and Sadasivapet.

"The Mutual Benefit Trusts do not have any special rights in the company through formal or informal arrangements, except such rights that are available to every public shareholder of the company," the company said.



Source: Economic Times

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SKS Microfinance completes securitisation deal of Rs 55.56 crore

SKS Microfinance, India's only listed micro-lender, today said it completed a securitisation deal of Rs 55.56 crore though a private sector bank.

SKS said in a statement this is the fifth micro-finance securitisation deal that the company has completed during the current financial. With this, the total securitisation during FY'14 (YTD) stood at Rs 727.37 crore.

The previous four substantial securitisation were Rs 321 crore (on September 30), Rs 80.81 crore (on December 11), Rs 215 crore (on December 19) and Rs 55 crore (on December 30), SKS said.

"SKS Microfinance Limited has downloaded the receivables from micro loans extended to more than 60,000 rural women entrepreneurs to a Special Purpose Vehicle, and Pass Through Certificates ( PTCs) have been purchased by a private sector bank," it said.

The entire pool qualifies for priority sector treatment as per RBI's guidelines, it further said. The pool is rated A1 + (SO) by a leading rating agency signifying "a very strong degree of safety regarding timely servicing of financial obligation," it added.


Source: Economic Times

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SKS completes Rs 321-cr securitisation transaction

SKS Microfinance Ltd has completed a securitisation transaction for Rs 321 crore with a major public sector bank.

The transaction is possibly the first substantial securitisation deal in the fiscal 2013-14 in the microfinance sector.

Dilli Raj, Chief Financial Officer, SKS Microfinance, said: "The present transaction generates liquidity of Rs 321 crore for the company and enables it to extend micro-loans to 4,75,000 rural women entrepreneurs.

somasekhar.m@thehindu.co.in

Source: thehindubusinessline

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Ramachandra Rao reappointed MD & CEO of SKS Micro

The board of directors of SKS Microfinance reappointed M. Ramachandra Rao as the Managing Director and Chief Executive Officer for a further period of five years, the company said in a notice to the BSE.

The appointment, which is effective from October 4, 2013, is subject to review after three years.

The market is agog with speculation that Vikram Akula, the founder and ex-chairman of SKS Microfinance, would stage a comeback with the help of five mutual benefit trusts.

In response to SKS Trust Advisors Pvt Ltd and five mutual benefit trusts’ bid to seek a board seat, SKS Microfinance on Tuesday said that no shareholder has any right to nominate a director.

Hyderabad-based SKS Microfinance, in a notice to the BSE, said it has received a request for a seat on the board of directors from SKS Trust Advisors and five mutual benefit trusts.

Source: thehindubusinessline

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SKS Micro ropes in Jack Trout for re-branding exercise

Encouraged by the turnaround in the last three quarters, SKS Microfinance Ltd has decided on a brand makeover. For this, the Hyderabad-based microfinance major has signed up global marketing strategist Jack Trout, president of Trout & Partners, to help in re-branding and repositioning its operations.

Jack Trout is not only the originator of important concepts in marketing strategy but also the author/co-author of many best-sellers such as Positioning: The Battle for Your Mind and Repositioning: Marketing In an Era of Competition, Change and Crisis.

In his reaction, Trout said, “I consider this an interesting assignment as re-branding/repositioning work in the social sector, particularly after a crisis that nearly annihilated a crucial social sector, brings multitudes of challenges.”

In a press release, M. R. Rao, Managing Director and CEO, SKS Micro, said: “It was imperative that we revisit the brand propositions in order to further increase our brand equity among our members and other key stakeholders.”

On the rebranding exercise, the company’s Chief Financial Officer S. Dilli Raj said, “We are back at the threshold of steady growth post our recent turnaround, and require expert counsel in ending the dichotomies/ ambiguities related to branding and positioning.”

The Rs 332-crore SKS Microfinance turned profitable this fiscal after nearly two years of financial and operational troubles, especially in its home State of Andhra Pradesh.

The company, first among MFIs to be listed, began with a bang on the bourses. However, its fortunes plummeted in Andhra Pradesh following a clampdown on its operations by the State. The turn of events led to the quitting of its founder chairman, Vikram Akula.

somasekhar.m@thehindu.co.in

Source: thehindubusinessline

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SKS Micro gets nod to shift registered office to Maharashtra

The Ministry of Corporate Affairs has approved shifting of the registered office of SKS Microfinance Ltd from Andhra Pradesh to Maharashtra.

The move by SKS to shift the reistered office is probably a fallout of the AP Government’s stringent regulations for the microfinance sector.

The State Government tightened regulation about three years back to rein in microfinance institutions, which were charging very high interest rates from borrowers and resorting to strong arm tactics for recoveries.

The Regional Director, Ministry of Corporate Affairs, South East Region, Hyderabad has approved shifting of the Registered Office of the company from AP to Maharashtra, SKS Microfinance said in a notice to the BSE

The microfinance institution’s members had passed a special resolution on August 27, 2012, through a Postal Ballot approving submission of application to the Regional Director, Ministry of Corporate Affairs, South East Region, Hyderabad for shifting its Registered Office from AP to Maharashtra.

In light of shifting of the Registered Office, the company has been granted three months extension of time up to December 31, 2013 for holding the 10th annual general meeting of the shareholders of the company for the financial year ended March 31, 2013, the notice said.

Source: thehindubusinessline

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SKS Microfinance postpones AGM

SKS Microfinance Ltd has postponed its annual general meeting scheduled to be held on September 30, 2013.

The postponement assumes significance as the company has rejected a nomination of its founder and ex-chairman Vikram Akula as the representative of the SKS Trusts, the largest shareholder in the company with a stake of 12.6 per cent.

SKS Microfinance on Tuesday said no shareholder had any right to nominate a director.

The reason cited for postponement of the board meeting, however, was different. The request was made on the basis of procedural aspects of the proposed shift of registered office from Hyderabad to Mumbai, according to an order from the registrar of the companies.

The only listed microlender was given three months time to conduct the AGM. No fresh date has been given.

Some analysts are seeing this as a move to scuttle the entry of Akula on to the board as that could be proposed in the AGM if held this month as scheduled.

"Though the trust had become the largest shareholder in the last couple of weeks, it did make some requests earlier for a position on the board with hints that the issue could be taken up at the AGM,’’ said an analyst.

SKS scrip lost 1.23 per cent on the Bombay Stock Exchange on Wednesday and is trading at Rs 141 by the lunch hour.

Source: thehindubusinessline

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No shareholder has right to nominate a director on its board: SKS Micro

In response to SKS Trust Advisors Pvt Ltd and five mutual benefit trusts’ bid to seek a board seat, SKS Microfinance Ltd on Tuesday said that no shareholder has any right to nominate a director.

Hyderabad-based SKS Microfinance, in a notice to the BSE, said it has received a request for a seat on the board of directors from SKS Trust Advisors and five mutual benefit trusts.

The five mutual benefit trusts are: SKS Mutual Benefit Trust – Medak, SKS Mutual Benefit Trust – Sadasivapet, SKS Mutual Benefit Trust – Sangareddy, SKS Mutual Benefit Trust – Jogipet, and SKS Mutual Benefit Trust – Narayankhed.

SKS Microfinance said: “Under the Company’s Articles of Association (AoA), no shareholder has any right to nominate a director.

“All requests for appointment are required to be made in accordance with the Companies Act and the AoA of the company and will be processed in accordance with law.”

SKS Trust Advisors is the largest shareholder in the microfinance company with 12.6 per cent stake.

The industry is agog with speculation that Vikram Akula, the founder and ex-chairman of SKS Microfinance, would stage a comeback with the help of the Trusts.

Source: thehindubusinessline

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SKS Trusts to seek place on SKS Microfinance board

SKS Trusts will be formally asking for a berth on the board of SKS Microfinance Ltd soon as the largest shareholder. “The board has not responded favourably to our earlier request to nominate a board member, despite the fact that there are other nominees from shareholders with a lower percentage than the Trusts. We will request now again,” Biksham Gujja, Director of the Trustee of SKS Trusts, told Business Line on Thursday.

On Tuesday, the Trusts, the original promoter of the SKS Microfinance Ltd, had become the largest shareholder in the company by increasing its stake to 12.6 per cent through open market purchase.

The industry is abuzz with rumours that Vikram Akula, the founder and ex-chairman of SKS Microfinance, would stage a comeback after his unceremonious exit from the company about a year-and-a-half back after it was badly hit by AP microfinance crisis.

On the relevance of Akula to the company today, the Trusts functionary said he could add value to both the trust and the company.

“We believe Vikram Akula’s approach to financial inclusion is similar to our view,” he said, adding that a person who had the skills and experience to “add value” to SKS Microfinance would be nominated.

Akula, who off-loaded his nine lakh shares in the company a couple of days ago, can now claim to be a complete outsider to the company with no individual stake be back on the board with the help of SKS Trusts with which he has a strong bonding.

“We would like SKS to get back to its original mission of promoting financial inclusion,” Gujja said while declining to comment on the efficiency of the present management.

When contacted, SKS Microfinance declined to comment on the developments.

naga.gunturi@thehindu.co.in

Source: thehindubusinessline

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SKS Microfinance posts Rs 5-cr profit in Q1

SKS Microfinance Ltd has posted a profit of Rs 5 crore in the first quarter ended June 30, 2013.

The country’s only listed micro-finance institution had incurred a Rs 39-crore loss in the corresponding quarter of the previous financial year.

This was the third consecutive quarter of profit for the company, which turned around after having been hit by losses after the microfinance crisis in Andhra Pradesh some years ago.

Rise in revenue

Revenues increased to Rs 117 crore (Rs 74.5 crore). Due to the increase in loan disbursements outside Andhra Pradesh, net interest income was higher, the company said in a release on Thursday.

In the last few quarters, the company’s turnaround strategy of fully providing for the Andhra Pradesh exposure, managing supply-side shocks, cost structure optimisation and recapitalisation led to profits, its Chief Financial Officer, S. Dilli Raj told Business Line.

The non-AP portfolio as on June 30, 2013 stood at Rs 2,003 crore.

“By the year-end, this will go up to Rs 2,800-3,000 crore, with a projected disbursal of about Rs 4,800 crore.

The profit after tax for the current financial year could be around Rs 60 crore,” he added.

Fresh provioning

During the quarter, SKS made an additional provision of Rs 11.7 crore towards its joint liability group loan portfolio in States other than AP. This entire provision related to just standard assets.

The SKS scrip gained marginally to end at Rs 99.45 on the Bombay Stock Exchange on Thursday.

naga.gunturi@thehindu.co.in

Source: thehindubusinessline

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SKS Microfinance posts Rs 2.7-crore profit in Q4

SKS Microfinance Ltd has posted a net profit of Rs 2.7 crore in the fourth quarter ended March 31, 2013.

In the corresponding period of the previous financial year, the company incurred a loss of Rs 320 crore, SKS Micro said in a release on Wednesday.

When contacted, its Chief Financial Officer Dilli Raj told Business Line that higher disbursements at Rs 1,295 crore, a 15 per cent hike in core interest income in non-AP portfolio, among others, drove the company to profits for a second consecutive quarter.

SKS, which suffered losses for seven consecutive quarters due to the Andhra Pradesh microfinance crisis in 2010 and subsequent AP MFI Act, turned red with Rs 1.1-crore profit in the third quarter of last fiscal.

For the full year 2012-13, the loss was at Rs 297 crore. In the FY12, the loss was 136 crore. The total revenue declined to 332 crore (Rs 436 crore).

OUTLOOK

The company is expecting about Rs 55-60 crore profit in the current financial year on a disbursement target of Rs 4,500 crore (Rs 32,86 crore), Dilli Raj said.

“We are also thinking of re-entering retail insurance as some issues with the insurance regulator are closed now,’’ he said. When asked if disbursals were resumed in Andhra Pradesh post a Supreme Court ruling allowing it to do so, he refused to comment.

Foreign institutional investors, who held 13.41 per cent stake in the company at the end of 2011-12, increased their stake to 35.94 per cent as on March 31, 2013. SKS Micro scrip gained 1.03 per cent on the Bombay Stock Exchange on Wednesday to end at Rs 127.65.

naga.gunturi@thehindu.co.in

Source: thehindubusinessline

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SKS Micro raises Rs 226 cr via securitisation deals, scrip gains

SKS Microfinance Ltd has concluded two secruitisation deals for Rs 226 crore.

With this, the Hyderabad-based company had completed 12 securitisation transactions with seven funding parters for Rs 1,207 crore in the financial year 2012-13 which ended on Sunday.

In addtion, SKS had also raised an incremental debt of Rs 1,680 crore for FY 13 and raised a fresh equity of Rs 263.5 crore. The total incremental fund flow stood at Rs 3,150 crore which is more than double the Rs 1,434 crore mobilsed in FY 12, the company said in a relase.

SKS Microfinance scrip gained 4.57 per cent after opening of trade on the Bombay Stock Exchange on Monday and is trading at Rs 127.10.

naga.gunturi@thehindu.co.in

Source: thehindubusinessline

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SKS Micro raises Rs 115 cr via securitisation deals

SKS Microfinance Ltd, India’s only listed micro-lender, today said it has completed two more securitisation transactions aggregating Rs 115 crore.

In a stock exchange filing, SKS without naming the rating agency said both the transactions were rated as A+(SO).

“The company has completed two securitisation transactions aggregating Rs 115 crore, rated A1+(SO). With this, the company has completed 10 securitisation transactions aggregating Rs 981 crore in FY13 (YTD),” SKS said in the filing.

When contacted Dilli Raj, Chief Financial Officer, SKS, said the securitisation was done from the receivables of non-AP portfolio.

“While one securitisation deal was done with a private sector bank, the other was completed with a public sector bank,” Raj told PTI.

Securitisation is the process of conversion of existing assets or future cash flows into marketable securities.

SKS shares rose 5.85 per cent to Rs 126.60 on Bombay Stock Exchange during afternoon trade.


Source: thehindubusinessline

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SKS plans to resume lending operations in Andhra Pradesh soon

Country’s only listed micro lender SKS Microfinance today said it plans to resume lending operations in Andhra Pradesh soon, two years after the state government came out with a stringent laws to regulate the industry.

SKS Chief Financial Officer, Dill Raj said the recent Supreme Court’s interim order was of great relief to them and paves way to resume operations in the state.

“That is primary relief we got (from the Supreme Court order). We plan to carry out our business in Andhra Pradesh strictly in compliance with the Supreme Court order. We will adhere to those two sections. Also, we will comply with the Reserve Bank Rules,” he said,

When contacted, R Subrahmanyam, state Principal Secretary, Rural Development, said the Andhra Pradesh government is going to file a detailed affidavit with Supreme Court.

“We have not been issued any notice by the Supreme Court in this case. As far as our interpretation goes, Supreme Court did not set aside AP MFI Act,” Subrahmanyam said.

The Supreme Court only said no coercive measures should be taken by the state government, he added.

Dilli Raj said, SKS has 122 branches in the state and 1,200 people are working.

“Now we are getting our plans ready for fresh lending. May be in two to three days time, we should be ready with the plans,” he added.

Meanwhile, shares of SKS closed at Rs 119.60, down 10.58 per cent over their previous close on the BSE.


Source: thehindubusinessline

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SKS Micro inducts Ranjana Kumar on board

SKS Microfinance Ltd has informed BSE that Ranjana Kumar has been appointed as an independent director on the company's board with effect from March 8.

Ranjana Kumar served as the Chairperson of Indian Bank and Nabard. She also held the constitutional post of Vigilance Commissioner in Central Vigilance Commission.


Source: thehindubusinessline

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IRDA slaps Rs 50-lakh fine on SKS Microfinance

The Insurance Regulatory and Development Authority (IRDA) has slapped a Rs 50-lakh penalty on SKS Microfinance Ltd, in perhaps the highest-ever penalty imposed so far.

The only-listed microfinance institution in the country was fined for making unauthorised changes in the benefits of policies of its clients while acting as a group policyholder or administrator.

The company had recovered advances extended towards funeral costs to the nominee of the deceased member which was later recovered illegally from the claim amounts paid by the insurer.

“The MFI has (also) levied a charge higher than the premium in violation of rules,” IRDA Chairman J. Hari Narayan said in the order hosted on its Web site on Wednesday.

SKS had generated ‘substantial’ amount of income under group insurance administrative charges by levying higher charges than usual, IRDA said.

The MFI, which was hit hard by AP Microfinance crisis, had illegally recovered outstanding loans from the death claim benefits of clients which were to be received by their nominees.

There was undue delay of at least 45 days between the actual date of collection of the premium and its conversion into group insurance policy.

This allowed SKS to use the money for short-term liquidity/investment needs while causing loss of coverage to the clients. The lapses were found in SKS’ insurance dealings for clients with LIC of India, Bajaj Allianz Life Insurance and ING Vysya during 2009-10 and 2010-11.


naga.gunturi@thehindu.co.in


Source: thehindubusinessline

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