Monday, August 16, 2010

SKS Microfinance IPO - Analysis, Recommendation, Subscription, Allotment, Listing

Analysis:
SKS Microfinance IPO has come out with an IPO of 16,791,579 shares. This includes fresh issue of 7,445,323 equity shares and an offer for sale of 9,346,256 equity shares held by different investors. (Sequoia Capital India II LLC, SKS Mutual Benefit Trust - Narayankhed, SKS Mutual Benefit Trust - Jogipet, SKS Mutual Benefit Trust - Medak, SKS Mutual Benefit Trust - Sadasivapet, SKS Mutual Benefit Trust - Sangareddy, Kismet Microfinance and Mauritius Unitus Corporation)

The company is the largest MFI in India in terms of total value of loans outstanding, number of borrowers and number of branches, according to the October 2009 CRISIL report titled India Top 50 Microfinance Institutions.

The IPO opens on July 28 and closes on July 30 for QIBs. The issue closes on August 2, 2010 for applicants in the retail and non-institutional categories. The company may consider participation by Anchor Investors. The anchor investor bid/ issue period shall be one day prior to the issue opening date.

The company has fixed the price band at Rs. 850 - Rs. 985.

Recommendation:
The issue has been graded by CARE as CARE IPO Grade 4 indicating above average fundamentals. The recent IPOs have had very good listing. Although, this IPO is also not cheap it may give listing returns.

Subscription:
SKS IPO got subscribed over 13.55 times but largely due to QII segment. At the close of the IPO,
QII segment got subscribed by 20.38 times
NII segment got subscribed by 0.13 times
Retail segment got subscribed by 0.16 times

Allotment:
Click here to check if you have been alloted SKS Microfinance shares!

Listing:
SKS Microfinance closed session at Rs 1,084.10, up 10.06% over the issue price of Rs 985. A share opened at Rs 1040 and touched an intraday high of Rs 1162 on NSE. On the BSE, a share ended at Rs 1,088.58, after witnessing an intraday high of Rs 1,159.90 and low of Rs 1,036.


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