SKS Microfinance Ltd is the first-ever microfinance company in India to tap the capital market.
The company has been assigned IPO grade 4/5 indicating above average fundamentals. The grading reflects SKSML's position as one of the largest players in the Indian micro finance industry, having pan India operations with a well diversified portfolio.
The grading takes into account track record of the promoters, experienced board of directors and strong management profile.
The grading also takes into account good corporate governance practices adopted by the company, including presence of various committees and independence of the board. The grading considers the strong financial position with healthy margins, including good asset quality, comfortable capital adequacy ratio, comfortable liquidity position and access to diverse sources of institutional funding. The grading also considers the strong industry growth in recent period with good prospects for future growth on account of large unmet potential demand, a press release here said.
The initial public offering, the first such issue by any microfinance company in the country, will be launched between July 28 and July 30.
The Hyderabad-based firm is entering the primary market with 1.69 crore equity shares of Rs 10 each, and expects to raise funds in the range of Rs 1,200 crore to Rs 1,300 crore, they added.
The proceeds from the IPO would be used for meeting the company's future capital requirements.
SKS Microfinance Founder and Chairperson Vikram Akula declined to comment on the date of the IPO launch, but said it will hit the market soon.
He further said that the company has received encouraging responses from institutional investors, and the IPO would attract some big firms when it opens. "We are in talks with institutional buyers and they have shown interest in the issue," he said.
Founded by Vikram Akula, SKS Microfinance has a customer base of around 53 lakh people.
SKS, which offers loans with an average ticket size of Rs 7,000, has so far raised around Rs 13,000 crore debt on a cumulative basis from various investors to meet its funding requirements.
The non-banking firm has back-up from several big private equity players, including Sequoia Capital-India.
Catamaran Management Services, a fund run by Infosys co-founder and chief mentor NR Narayana Murthy, has also made an investment in SKS. Funding in SKS was the first investment of Catamaran.