Turning bullish on the country’s only listed microfinance company, foreign investors have hiked their stake in SKS Microfinance to an all-time high of 31.77% in the July-September quarter — from a record low of 8.33% at the end of preceding three-month period.
The sharp increase in the shareholding of foreign institutional investors (FIIs) coincided with a massive rally of 88% in the share price of Hyderabad-based SKS Microfinance between July and September this year.
On other hand, the total promoter holding dipped to 29.58% during the quarter from 37.62% in April-June 2012, as per information available with the stock exchanges.
Helped by the significant share purchase by FIIs, SKS Microfinance stock rallied by about 88% between July 1 and September 30, after a plunge of 34% in the preceding three months. The stock has taken a major beating since its listing in August 2010 at a price of over R1,000 per share and is currently trading at near R120 per share at the stock exchanges. The company had debuted on the bourses after sale of shares in Initial Public Offer at a price of R985 a piece.
The foreign investors that have acquired fresh shares during the last quarter include CLSA, Royal Bank Investment, Credit Suisse and Morgan Stanley.
Currently, CLSA (Mauritius) owns 8.77%, while Royal Bank Investment Partners (London) owns 4.62%. Morgan Stanley (Singapore) and Credit Suisse held 4.16% and 1.48% stakes respectively.
Besides, the number of FIIs stands at 30, up from against 24 at the end of April-June quarter. Analysts believes the fresh infusion of capital through a qualified institutional placement (QIP) route in July as well as the company’s reduction of its exposure to its main state, Andhra Pradesh, have helped FIIs to rush towards it.
Moreover, SKS trimmed its losses in the second quarter of the current fiscal to R262 crore as against R384.5 crore in the corresponding quarter last year. The losses narrowed due to a drop in bad debt provisions after the mico lender reduced its exposure in Andhra Pradesh.
The company’s operations went into a tailspin after Andhra Pradesh came up with regulations in October 2010 restricting lending and recovery.