SKS Microfinance is hoping to return to the path to profitability by the third quarter of the current financial year, as it expects to increase its non-AP credit book from R1,320 crore to R2,600 crore by end of FY13. On Tuesday, the company announced it has raised R230 crore through the Qualified Institutional Placement (QIP) route.
?We hope to return to the path of profitability by the third quarter. We are trying to optimise cost structures as an immediate plan of action. In the process, we would be increasing the non-AP credit book,? S Dilli Raj, chief financial officer of SKS Microfinance, told FE. Besides, there was a 95% recovery rate in non-AP states in the fourth quarter of the last financial year on a network of 1,461 branches as of March 2012, he added.
?We see a revival in the business with the Centre and the Reserve Bank of India (RBI) formulating new regulations for the sector.?
Announcing that the company?s QIP has been oversubscribed, CFO said, ?The overwhelming response to our QIP validates the relevance of microfinance for financial inclusion in India. The QIP proceeds of R230 crore and the proposed preferential allotment for R33.50 crore aggregating R263.50 crore brings in the much-needed growth capital,? Dilli Raj said. ?This will help us strengthen our leadership position and improve the sector prospects,? said CEO and MD MR Rao. ?QIP equips us to meet credit requirement of our four million rural borrowers who have been waiting patiently for sometime now,? he added.
The company?s loan book had shrunk to nearly one-fifth to R1,320 crore from around R5,000 crore in October 2010, before the crisis. Specifically, the loan book dropped from R1,491 crore to R236 crore, while that outside the state reduced to R1,320 crore from R3,500 crore.
