The country?s only listed microfinance company, SKS Microfinance, on Wednesday said it will raise the investment limit for foreign institutional investors in the company to 74% from 24% at present.
?The proposal to raise the investment limit would pave way for the proposed QIP issue which is slated to happen by March 31, 2012,? said Dilli Raj, chief financial officer, SKS. FIIs hold about 15% in the company and are showing a lot of interest for increasing the holding, he added.
Following the announcement, shares of the firm rose by 5% to hit the upper circuit in afternoon trade on the BSE at R98.35 a share. Earlier this month, SKS had said that it would raise up to R500 crore through the sale of shares to institutional investors.
The company said that the shareholders at the Extra Ordinary General Meeting (EGM) held on Wednesday passed the special resolution to increase the investment limits.
The RBI on Monday stated microfinance institutions (MFIs) can raise up to $10 million through external commercial borrowings (ECBs), as against the earlier limit of $5 million. ?Considering the specific needs of the sector, the existing ECBs policy has been reviewed in consultation with the government and it has been decided that Microfinance Institutions (MFIs) may be allowed to raise ECB up to $10 million or equivalent during a financial year for permitted end-uses, under the automatic route,? RBI said.
The company had reported a net loss of R384.54 crore in the September quarter of this year as against a net profit of R80.55 crore during the corresponding quarter last year. Operating income declined 64.8% to R122.29 crore in Q2 this year. In July 2010, SKS raised through its IPO, over R1,650 crore. But, of late, MFIs across the industry are going through some tough times, and a fund crunch is staring them on the face.
