SKS Microfinance, the Indian Microfinance Institution backed by investors which included Sequoia Capital, Narayan Murthy,Vinod Khosla and George Soros closed it’s IPO yesterday and had received bids for 13.69 times the stock available in an initial public offering.
The portion allocated to QIB’s was oversubscribed 20.38 times,while the portion for HNI’s was oversubscribed by 18.62 times.The retail investors portion was oversubscribed by 2.81 times.
SKS Microfinance IPO – Combined Demand on BSE & NSE
SKS Microfinance’s IPO was able to attract blue chip investors which included funds managed by Morgan Stanley, BNP Paribas, Soros’s Quantum Fund, Goldman Sachs Group, JPMorgan Chase, Nomura Holdings and Fidelity Investments.
SKS Microfinance gains from extra day given for small investors
The decision by Sebi to give an extra day for retail investors to bid for IPOs and FPOs seems to be paying off.
SKS Microfinance which was over subscribed 13.69 times also saw large HNI and retail response on the last day for these categories of investors.
The QIB segment of SKS Microfinance was subscribed 20.38 times by Friday evening. However HNI’s and Retail investors had bid for only 0.13 and 0.16 times respectively on Friday (the last day for QIBs). But when bidding opened on Monday these categories ended up with over subscription of 18.26 and 2.75 times, respectively.
SKS Microfinance Listing Price
SKS Microfinance is expected to soon announce the cut off price and the allotment ratio. Looking at the demand from Institutional investors, some analysts are predicting that SKS Microfinance could list in the minimum range of Rs 1200- Rs 1300, giving investors gains of 20-30 %. However if sentiments in the global markets improve the listing price could be even higher, an analyst with a broking firm predicted.
The IPO of the mexican microfinance institution Banco Compartamos was oversubscribed 13 times when it hit the primary markets in April 2007, and the share price had surged 22 percent in the first day of trading , even though the offering price was twelve times the book value of the company.
Other Microfinance Companies fast track their listing plans
Market sources reveal that with the positive response and successful completion of SKS Microfinance’s IPO other microfinance institutions are getting ready to hit the primary markets. Spandana Sphoorty Financial, the country’s second largest microfinance institution (MFI), is expected to announce it’s decision soon. Other large MFIs which could go public are SHARE Microfin and Asmitha Microfin. BSFL which is promoted by the BASIX Group had announced that it will be looking at an IPO only after 2012.