N R Narayana Murthy, founder and former CEO of Infosys, a global consulting and information technology services company based in India, will reportedly invest in SKS Microfinance Ltd, an Indian microfinance institution (MFI) expected to soon float an initial public offering (IPO). Mr Murthy will make the investment through his USD 129 million venture capital fund, Catamaran. Sources close to the deal believe it is part of a pre-IPO sale process at SKS.

SKS is heavily backed by an international consortium of venture capital and private equity investors that includes Sequoia Capital, Sandstone Capital, Kismet Capital, Unitus Equity Fund and Silicon Valley Bank. Inside sources declined to divulge the size of the investment. However, venture capital trackers, who are not involved in the deal-making at SKS, believe the transaction will likely be close to USD 10 million.

By Jay Kumar, Research Assistant

About SKS Microfinance Ltd:
SKS Microfinance is a microfinance institution (MFI), launched in 1998, that caters to women in India. In 2005, it transformed into a for-profit non-banking financial company (NBFC). As of September 2009, SKS had 3.5 million active borrowers and 1,676 branches, compared with 771branches in March of 2008. According to the MIX Market, the microfinance information clearinghouse, its total assets as of 2008 were USD 596.2 million, with a return on assets of 3.68 percent and return on equity of 18.72 percent. SKS products include: income-generating loans, mid-term loans, individual loans, loan-cover insurance and health insurance.

Additional Resources:
1.) http://in.reuters.com/article/indiaDeals/idINIndia-45606920100122?pageNu…
2.) http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=SKS…