MICROCAPITAL BRIEF: SKS Microfinance Limited, Microfinance Institution (MFI) in India, Files to Raise $250m in Initial Public Offering (IPO)

There are now more details available regarding the much-anticipated initial public offering (IPO) of SKS Microfinance Limited, a microfinance institution (MFI) based in India, which MicroCapital covered most recently on March 9, 2010. According to a document filed with the Securities and Exchange Board of India, SKS plans to raise INR 1,100 crore, the equivalent of over USD 250 million. The issue will be worth 16.7 million shares, comprised of 7.4 million shares of fresh issue and 9.3 million shares sold by current shareholders. These shareholders include Mauritius Unitus Corporation, a subsidiary of Unitus Equity Fund, and Sequoia Capital India, the India-focused arm of the venture capital fund. Sequoia plans to sell less than one-third of its stake, approximately 4 million shares. The number of shares that Unitus is selling has not been released. According to the filing, at least 60 percent of the IPO shares will be made available to institutional investors. Citigroup, a US-based financial services company; Kotak Mahindra, an Indian private commercial bank; and Credit Suisse, a Swiss financial services company, will be arrangers of the deal. The company will be listed on the National Stock Exchange of India and the Bombay Stock Exchange.

By Christopher Maggio, Research Assistant

About
SKS Microfinance

Description
SKS Microfinance is an microfinance institution (MFI), launched in 1998, that caters to women clients 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 771 branches in March of 2008. According to the MIX Market, the microfinance information clearinghouse, its total assets as of 2008 were USD 596 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.

Contact
Address:
Maruti Mansion Municipal No.2-3-578/1, Kachi Colony, Nallagutta, Minister Road
Secunderabad
Andhra Pradesh
500 003
India

Phone: +91 40 4452 6000

Fax: +91 40 4452 6001

Email: info@sksindia.com

About
Kotak Mahindra Bank

Description
Kotak Mahindra Bank is a private bank based in Mumbai, India. It is under the umbrella of the Kotak Mahindra Group, which also offers stock brokerage, mutual funds, life insurance and investment banking. The bank was originally founded in 1985 as Kotak Capital Management Finance Limited, a non-banking financial organization. In 2003, it was converted into a bank. In November 2009, Kotak Mahindra Bank contracted with the International Finance Corporation’s Global Trade Finance Program, receiving a trade financing line of up to USD 51 million to on-lend to small and medium-sized enterprises (SMEs).

Kotak Mahindra Bank does not report to the MIX Market, the microfinance information clearinghouse.

Just the Facts
-Country of Incorporation: India
-Year Founded: 1985 (as Kotak Capital Management Finance Limited)
-Legal Status: Private Bank
-Area of Operation: Global
-Participant(s)/Backer(s)/Investor(s): Kotak Mahindra Group
-Products: Deposit Accounts, Loans, Investment Services, Business Banking Solutions, Treasury and Fixed Income Products

Contact Information
+91 22 6600 6022

About
Sequoia Capital

Description:
Sequoia Capital is a venture capital fund that allocates part of its portfolio to microfinance investments. Sequoia Capital’s most well-known investment is in SKS Microfinance, an Indian microfinance institution (MFI). It purchased a 10 percent stake in another Indian MFI, Equitas, in January of 2010.

Just the Facts:
Country of Incorporation: United States
Year Founded: 1972
Area of Operation: Global
Instruments: Equity

Contact Information:
3000 Sand Hill Road, 4-250
Menlo Park, CA 94025
T: +1 650 854 3927
F: +1 650 854 2977

Additional Resources
DNA India article entitled ‘SKS first microfinancier to float IPO’: http://www.dnaindia.com/money/report_sks-first-microfinancier-to-float-ipo_1363883

MICROCAPITAL BRIEF: SKS Microfinance, a Microfinance Institution (MFI) Based in India, Expected to File for Initial Public Offering (IPO) in Next Four Weeks (March 9, 2010): https://www.microcapital.org/microcapital-brief-sks-microfinance-a-microfinance-institution-mfi-based-in-india-expected-to-file-for-initial-public-offering-ipo-in-next-four-weeks/

MICROCAPITAL BRIEF: Catamaran Venture Capital Fund to Invest in SKS Microfinance Ltd, an Indian Microfinance Institution Expected to Soon Launch an Initial Public Offering (IPO) (January 25, 2010): https://www.microcapital.org/microcapital-brief-catamaran-venture-capital-fund-to-invest-in-sks-microfinance-ltd-an-indian-microfinance-institution-expected-to-soon-launch-an-initial-public-offering-ipo/

MICROCAPITAL.ORG STORY: SKS Microfinance Plans for India’s First Microfinance Institution’s (MFI) Initial Public Offering (IPO), Managed by Citigroup, Credit Suisse and Kotak Mahindra Capital (October 12, 2010): https://www.microcapital.org/microcapitalorg-story-sks-microfinance-plans-for-india%E2%80%99s-first-microfinance-institution%E2%80%99s-mfi-initial-public-offering-ipo-managed-by-citigroup-credit-suisse-and-kotak-mahindra/

MicroCapital’s Microfinance Universe profile: SKS Microfinance

MicroCapital’s Microfinance Universe profile: Kotak Mahindra Bank

MicroCapital’s Microfinance Universe profile: Sequoia Capital

Citigroup: http://www.citigroup.com/

Credit Suisse: http://www.credit-suisse.com/

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