SKS Microfinance, a publicly traded microfinance institution (MFI) based in India, confirms that it has received an inquiry from the Securities and Exchange Board of India (SEBI), a government institution whose mandate is to protect the interests of investors, about SKS’s recent expulsion of its former CEO Suresh Gurumani [2].
A spokesman for the MFI claims that the company has already its response. An unspecified source reportedly postulates that “the regulator has asked whether the termination of Gurumani was planned when SKS filed the draft prospectus with it [SEBI] in March for IPO [initial public offering].” Responding to worries about the company, M R Rao, the current CEO, insists that “there is no crisis. The stock price crashing is not a concern, as it will bounce back. There will be no change in management strategy.” Mr Rao adds that SKS will continue its focus on client acquisition and the expansion of its branch network.
Stocks of SKS closed six percent lower at the closing bell of October 8th in the Bombay Stock Exchange, after falling six percent on October 4th after the news of Gurumani’s expulsion was announced [2]. As of March 31, 2010, SKS Microfinance Private Limited reports to the Microfinance Information Exchange (MIX), the microfinance information clearinghouse, total assets of USD 897 million, a gross loan portfolio of USD 653 million, a return on assets of 4.96 percent, a return on equity of 21.56 percent and 5.79 million active borrowers.
About SKS Microfinane:
SKS Microfinance is an Indian microlender that delivers microfinance products through a group lending model to impoverished women in India. It is a for-profit non-banking finance company which converted to a public limited company in May 2009 and launched an initial public offering on July 28, 2010. 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. As of March 31, 2010, SKS Microfinance Private Limited reports to the Microfinance Information Exchange (MIX), the microfinance information clearinghouse, total assets of USD 897 million, a gross loan portfolio of USD 653 million, a return on assets of 4.96 percent, a return on equity of 21.56 percent and 5.79 million active borrowers.
By Trevor Kwong, Research Assistant
Sources and Additional Resources:
[1] Source Article: The Economic Times: About SKS Microfinance:SKS responds to Sebi letter on CEO sacking; shares slump 6 pc:
http://economictimes.indiatimes.com/markets/stocks/market-news/SKS-responds-to-Sebi-letter-on-CEO-sacking-shares-slump-6-pc/articleshow/6715054.cms
[2] MICROCAPITAL BRIEF: CEO of India’s SKS Microfinance Steps Down, Stock Falls 6%:
https://www.microcapital.org/microcapital-brief-ceo-of-indias-sks-microfinance-steps-down-stock-falls-6/
[3] MicroCapital Universe: SKS Microfinane:
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=SKS+Microfinance
[4] Securities and Exchange Board of India (SEBI):
http://www.sebi.gov.in/Index.jsp?contentDisp=FAQ
[5] Business Standard: After CEO’s expulsion, SKS reassures stakeholders:
http://www.business-standard.com/india/storypage.php?autono=410370
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