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
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.”
About SKS Microfinance
SKS Microfinance is a non-bank finance company (NBFC) whose mission is to eradicate poverty by providing financial services to the poor. Established in 1998, SKS Microfinance is India’s largest and one of the world’s fastest growing microfinance organizations with an annual growth rate of 188 per cent. It currently serves 4.05 million clients across 60,000 villages and slums in 18 states.
It has disbursed Rs. 6,996 Crore in loans with a 99 % repayment rate. SKS Microfinance also provides life and health insurance to its clients. SKS has received numerous awards including the Young Global Leaders by World Economic Forum, CGAP Pro-Poor Innovation Award, the ABN-AMRO/Planet Finance Process Excellence Award, Citibank Information Integrity Award, the Digital Partners SEL Award and the Grameen Foundation USA Excellence Award. It was founded by Vikram Akula, who was named by TIME magazine as one of the 100 Most Influential People in the World (2006).