MICROCAPITAL BRIEF: Indian SKS Trust Advisors Buys 2.7% of SKS Microfinance for $2m, Increasing Stake to 12.6%

SKS Trust Advisors Private Limited, the India-based trustee of five mutual benefit trusts benefiting groups who borrow from SKS Microfinance Limited, reportedly has purchased an additional 2.69 percent of the shares of SKS Microfinance, increasing its stake in the firm to 12.6 percent. SKS Trust reportedly acquired approximately 1.02 million shares in the name of SKS Mutual Benefit Trust Medak at a price of INR 131 (USD 2) per share [1]. SKS Microfinance is a for-profit company that delivers microloans and microinsurance to groups of impoverished women in India [1].

As of September 30, 2012, SKS reported total assets of USD 354 million and a gross loan portfolio of USD 250 million that has been disbursed to approximately 3.9 million borrowers. As of March 2012, SKS reported return on assets of -45.8 percent and return on equity of -111 percent. Financial information for SKS Trust is not available.

By Anesa Kratovac, Research Associate

About SKS Trust Advisors Private Limited

SKS Trust is the sole trustee of five mutual benefit trusts (MBT), whose beneficiaries are self-help groups that borrow from SKS Microfinance, a microlender in India. The MBTs were formed in 2003 with the objective of promoting and enhancing the social and economic welfare of groups of poor women.

About SKS Microfinance Limited

SKS Microfinance is a for-profit microfinance institution (MFI) that was launched in 1998. SKS converted into a public limited company in May 2009 and launched an initial public offering on July 28, 2010. It since diversified to offer gold loans and microinsurance services, but it does not accept deposits. As of September 30, 2012, SKS reported total assets of USD 354 million and a gross loan portfolio of USD 250 million disbursed to approximately 3.9 million borrowers. As of March 2012, SKS reported return on assets (ROA) of -45.8 percent and return on equity (ROE) of -111 percent. Shares of SKS are traded on the Bombay Stock Exchange and India’s National Stock Exchange.

Additional Sources and Resources:

Live Mint News Online Article, “SKS Trust Hikes Stake in SKS Microfinance,” http://www.livemint.com/Companies/dj30U0GIt0Nj594WmBLQuM/SKS-Trust-hikes-stake-in-SKS-Microfinance.html

MicroCapital Article, April 11, 2013, “MICROCAPITAL BRIEF: SKS Microfinance of India Completes Two Securitizations Totaling $41m,” https://www.microcapital.org/microcapital-brief-sks-microfinance-of-india-completes-two-securitizations-totaling-41m/

MicroCapital Article, April 2, 2013, “MICROCAPITAL BRIEF: Government of India’s Andhra Pradesh Moves to Challenge Supreme Court Interim Order as SKS Microfinance Resumes Operations in the State,” https://www.microcapital.org/microcapital-brief-government-of-indias-andhra-pradesh-moves-to-challenge-supreme-court-interim-order-as-sks-microfinance-resumes-operations-in-the-state/

MicroCapital Article, March 1, 2013, “MICROCAPITAL BRIEF: SKS Microfinance Fined $92k for Collecting Improper Fees as Agent of Bajaj Allianz Life Insurance,”https://www.microcapital.org/microcapital-brief-sks-microfinance-fined-92k-for-collecting-improper-fees-as-agent-of-bajaj-allianz-life-insurance/

MicroCapital Universe Profile: SKS Microfinance: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=SKS+Microfinance

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