Defying the broader market trend, shares of SKS Microfinance, the country's largest microfinance player, surged by 20% in early morning trade on the bourses for the second consecutive day today.
The stock, which has been on an uptrend for the last three trading sessions, surged by 20 per cent in morning trade today to hit the upper circuit limit on both the Bombay Stock Exchange and National Stock Exchange in the wake of the government unveiling a draft Bill to tighten regulation of the microfinance sector.
The stock was quoted at Rs 493.20, up 20% from yesterday's close, on the BSE and on the NSE, it was at Rs 494.20, up 20% vis-a-vis its last close.
The surge in the counter was despite the fact that the broader market was trading in negative territory. At 1043 hours, the BSE benchmark index Sensex was down 52.28 points at 19,026.02.
The government on Wednesday released the draft Micro Financial Sector (Development and Regulation) Bill, 2011, which seeks to make it mandatory for all microfinance institutions to be registered with the Reserve Bank of India, making it the sectoral regulator.
The Bill, in its earlier avatar, had proposed that the National Bank for Agriculture and Rural Development (NABARD) would be the regulator of the sector.
Reportedly, SKS Microfinance CFO Dilli Raj yesterday said that the current measure would be "hugely positive" for the country's microfinance lenders.