MICROCAPITAL BRIEF: SKS Trust Advisors Sells 7.6% of SKS Microfinance, Decreasing Stake to 4.8%

SKS Trust Advisors Private Limited, the India-based trustee of five mutual benefit trusts benefiting groups who borrow from SKS Microfinance Limited, reportedly has sold a 7.6-percent stake in SKS Microfinance, a for-profit Indian microfinance institution (MFI), to an unspecified buyer. With this sale, SKS Trust has reduced its stake in the company from 12.4 percent to 4.8 percent. Based on a share price of INR 285 (USD 4.8), which was the stock’s closing value on India’s National Stock Exchange (NSE) on June 5, 2014, SKS is valued at INR 30.8 billion (USD 522 million).

As of December 2013, SKS reported a gross loan portfolio of USD 431 million and 4.7 million active borrowers. As of March 2013, SKS reported return on assets of -15.7 percent and return on equity of -73.4 percent. The MFI does not accept deposits. Financial information for SKS Trust is not available.

By Juan Blanco, Research Associate

About SKS Trust Advisors Private Limited

SKS Trust is the sole trustee of five mutual benefit trusts (MBTs), 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 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 December 2013, SKS reported a gross loan portfolio of USD 431 million and 4.7 million active borrowers. As of March 2013, SKS reported return on assets of -15.7 percent and return on equity of -73.4 percent. The MFI does not accept deposits. Financial information for SKS Trust is not available.

Sources and Additional Resources

[1] Financial Chronicle, “SKS Trust sells 7.6% stake in SKS Microfinance,” by Trushna Udgirkar, 2014, http://www.mydigitalfc.com/news/sks-trust-sells-76-stake-sks-microfinance-545

MicroCapital, September 20, 2013, Indian SKS Trust Advisors Buys 2.7% of SKS Microfinance for $2m, Increasing Stake to 12.6%

MicroCapital, June 7, 2011, Paper Gains on Early Investment in SKS Microfinance Largely Evaporate For Sequoia Capital

MicroCapital, February 7, 2011, Microfinance Institutions Network (MFIN) of India to Investigate Claims of Improper Handling of Mutual Benefit Trusts (MBTs) by SKS Microfinance, SHARE Microfin and Spandana Sphoorty

MicroCapital Universe Profile: SKS Microfinance

Do you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at https://www.microcapital.org/products-page/

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