Today shares of SKS Microfinance fell by 20% and hit the lower circuit after the company issued an earnings warning. The stock opened at Rs 797 and 9:40 AM began it’s perilous drop and had in a short span of 15 minutes touched the lower circuit of 20%. The stock witnessed high volumes and more than 2.9 Million shares were traded on the NSE.
At today’s closing price the shares of SKS Microfinance’s share price has dropped by Rs 853 since the peak of Rs 1491.50 that it made on the National Stock Exchange.
Given below is announcement filed by SKS Microfinance with the National Stock Exchange
Update on the operations of SKS Microfinance Limited in the State of Andhra Pradesh.
1. Centre meetings in Andhra Pradesh
The company by its communication dated November 8, 2010 notified that it was not able to conduct village centre meetings in 54% of the centers in AP for the week ended October 29, 2010. For the week ended November 12 , 2010 , the company was able to hold 97% of the centre meetings in AP .
However as the Andhra Pradesh Micro Finance Institutions ( Regulation of Money Lending ) Ordinance 2010 AP Ordinance ) read in conjunction with Rules and various notifications of the AP government stipulated that the periodicity of the loan repayment should not be less than a month, no collection or disbursement was done in said meetings .
Also 66 SKS Microfinance field staff (AP) arrested or detained without FIRs have all been released .
2. Collection from November 15, 2010
As one (1) month has passed since October 15, 2010 i.e. the date of the AP Ordinance , we commenced collection in those centers where we did not collect in the last 30 days . The collections are lower than normal on account of transition from weekly to monthly collection cycle and the related change in MIS, Passbook and member communication.
As said in our earlier notification, if this is not redressed satisfactorily, the resultant reduction in collections in AP is likely to have a material impact on the company’s revenues, profitability and asset quality of the AP portfolio.
We have obtained provisional registration certificates from DRDA and MEPMA ( wherever applicable) ) in all the 23 districts.
4. Credit lines
SKS Microfinance Microfinance holds sanctioned credit limits of Rs. 2,500 Crs. from various banks and also confirms that 7 banks have disbursed a sum of Rs. 292 Crs post the AP Ordinance to us . We disbursed Rs.1,048 Crs for the month of October 2010.
5. Non AP Operations
2,09,410 centre meetings in 18 other non AP states where the company is present were held on schedule for the week ended November 12, 2010 and collections were in line with historical average of 99%.