SKS Microfinance, an Indian microfinance institution (MFI), reportedly has completed a securitization deal worth INR 544 million (USD 10 million). The MFI securitized receivables from approximately 64,500 microloans to a special purpose vehicle for which pass-through certificates (PTCs) have been purchased by an unnamed non-banking entity. The average loan amount is approximately INR 11,500 (USD 211).
Following the transaction, SKS shares rose to their highest in the last year, reaching INR 185 (USD 3.39) on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).
SKS completed a similar securitization transaction worth USD 36 million in November 2012, as was reported by MicroCapital at that time.
As of September 30, 2012, SKS reports a gross loan portfolio of USD 249 million disbursed to approximately 3.9 million borrowers. As of year-end 2011, SKS reported return on assets (ROA) of -49.85 percent and return on equity (ROE) of -125.51 percent. SKS does not accept deposits.
By Charlotte Newman, Research Associate
About SKS Microfinance
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 into offering gold loans and loans to small stores. Its equity investors include Quantum Hedge Fund, Sequoia Capital, Vinod Khosla, Small Industries Development Bank of India, Bajaj Allianz, Yatish Trading, Kismet Capital, Sandstone Capital, Silicon Valley Bank and Unitus. SKS currently trades on the Bombay Stock Exchange and the National Stock Exchange. As of September 30, 2012, SKS reports a gross loan portfolio of USD 249 million disbursed to approximately 3.9 million borrowers. As of year-end 2011, SKS reported return on assets (ROA) of -49.85 percent and return on equity (ROE) of -125.51 percent. SKS does not accept deposits.
Sources and Additional Resources:
Business Standard: “SKS Raises Rs 54 Cr Via Securitisation,” http://www.business-standard.com/india/news/sks-microfinance-to-raise-rs-54-cr-via-securitisation-deal-/198739/on
Wall Street Journal: “SKS Microfinance Shares Jump on Loan Deal,” http://online.wsj.com/article/SB10001424127887324640104578164602767925688.html#articleTabs%3Darticle
MicroCapital.org story, December 2, 2012, “MICROCAPITAL BRIEF: SKS Microfinance of India Announces $36m Securitization Under Amended Reserve Bank of India Guidelines,” http://www.microcapital.org/microcapital-brief-sks-microfinance-of-india-announces-36m-securitization-under-amended-reserve-bank-of-india-guidelines/
MicroCapital.org story, October 4, 2012, “MICROCAPITAL BRIEF: SKS Microfinance of India Posts Portfolio Growth of 21% Outside Andhra Pradesh; Royal Bank of Scotland, Morgan Stanley Asia Purchase Stakes as Deutsche Securities Mauritius Cashes Out,” http://www.microcapital.org/microcapital-brief-sks-microfinance-of-india-posts-portfolio-growth-of-21-outside-andhra-pradesh-royal-bank-of-scotland-morgan-stanley-asia-purchase-stakes-as-deutsche-bank-cashes-out/
MicroCapital Universe Profile: SKS Microfinance
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