Shares of SKS Microfinance today surged 19 per cent in the morning trade on the bourses after the Union Cabinet approved a bill to regulate the micro finance industry and bring the micro lenders under the purview of the Reserve Bank.
Buoyed by the move, shares of the micro finance lender soared 19 per cent to touch a high of Rs 105.70 on the BSE, brokers said.
Similarly, at the NSE, the stock zoomed up by 19.63 per cent to Rs 106.
Later, the stock pared some initial gains and was trading at Rs 98.40, up 10.87 per cent at 1120 hours on the BSE.
"The bill is positive for the micro finance institutions sector," brokerage house Angel Broking said in a report.
According to Ashika Stock Brokers Research Head Paras Bothra, the approval of the bill is very positive for the entire micro finance industry and SKS will be a major beneficiary of the move.
On the volume front, 5.24 lakh shares of the company were traded on the BSE, while more than 12 lakh shares changed hands on the NSE during the morning trade.
The Bill, which was drafted in the backdrop of problems faced by borrowers of MFIs in Andhra Pradesh and other states, would now be introduced in Parliament for consideration.
As per the draft, it would be mandatory for micro finance institutions (MFI) to be registered with the Reserve Bank and have a minimum net-owned funds of Rs 5 lakh.
Yesterday, SKS Microfinance said it will slash 1,200 jobs and shut down 78 branches in Andhra Pradesh.
Surge in the stock outperformed the weak broader market where the BSE benchmark Sensex was trading at 16,262.68, down 157.37 points at 1120 hrs.
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