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SKS Microfinance raises Rs 75 Crores from Debt Capital Market
May '2008
- Largest Debenture issue by a MFI till date.
- First MFI to list on the stock exchange.
- Standard Chartered is sole book runner and lead arranger.
Hyderabad/Mumbai, May 18, 2009: SKS Microfinance, India's largest and the world's fastest growing microfinance company, and Standard Chartered Bank, the country's largest international bank, have completed a unique transaction in the debt capital market, by enabling the country's first listed Non Convertible Debenture (NCD) Issue by a microfinance institution.
SKS Microfinance has raised Rs. 75 crore through an issue of 1-year NCD at a coupon rate of 10 percent. The NCDs have been listed on The Stock Exchange, Mumbai.
Announcing this landmark transaction, S. Dilli Raj, Chief Financial Officer, SKS Microfinance, said, "A new asset class is born. For the first time, a debt security issued by an MFI has been listed. In pursuance of it's 'thought leadership' role for the sector, SKS has already introduced several mainstream capital market financial products to the MFI sector and this issuance marks a new chapter in 'Funding innovation'"
Commenting on the impact of the transaction on SKS and the sector, Suresh Gurumani, MD & CEO of SKS Microfinance, said ,"This transaction enables us to diversify the sources base and access capital market funding. By listing the NCDs on the stock exchange, SKS raises the bar on transparency and governance standards for the sector as a whole".
Standard Chartered India is the sole book runner and lead arranger for the Issue.
Joseph Silvanus, Head of Development Organizations, South and South-East Asia, Standard Chartered Bank, said, "This deal is a key milestone in the industry, and consequently, Standard Chartered Bank, is proud to have facilitated it. The Bank has an agenda to support the growth of the microfinance sector in India, part of which is to help the sector broaden its fund raising base to support its rapid growth. Over a period of time, this is expected to reduce the cost of funds to the MFIs, which in turn will translate into more affordable funds for the ultimate borrower."
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