SKS Microfinance rose 1.93% to Rs 182 at 12:03 IST on BSE after the company issued a profit guidance of Rs 125 crore for FY 2015.
The announcement was made before market hours today, 5 February 2014.
Meanwhile, the S&P BSE Sensex was down 46.22 points or 0.23% at 20,165.71.
On BSE, so far 1.37 lakh shares were traded in the counter as against average daily volume of 2.75 lakh shares in the past one quarter.
The stock hit a high of Rs 186.15 and a low of Rs 180.40 so far during the day. The stock had hit a 52-week high of Rs 209.85 on 24 December 2013. The stock had hit a 52-week low of Rs 95.60 on 24 May 2013.
The stock had outperformed the market over the past one month till 4 February 2014, rising 0.31% compared with Sensex's 3.07% fall. The scrip had also outperformed the market in past one quarter, jumping 15.75% as against Sensex's 4.84% fall.
The small-cap company has equity capital of Rs 108.21 crore. Face value per share is Rs 10.
SKS Microfinance (SKS) on Tuesday, 4 February 2014 announced its plans to raise growth capital of up to Rs 400 crore in FY 2015 with a maximum dilution of 20% as it sets out to create SKS Microfinance 3.0 to tap into the opportunities presented by the transformation of Indian villages into signposts of future in view of rural buoyancy.
SKS said that SKS Microfinance 3.0 plans to address the growing demand among its customers for an entire range of products and services including insurance, mobile loans, loans for solar lights, etc. in addition to micro credit, which will remain the company's core business. Pre-Andhra Pradesh microfinance crisis, the non-Andhra Pradesh portfolio outstanding of the microfinance sector was Rs 28300 crore, which stood at Rs 18596 crore as of September 2013 with a huge gap of Rs 9704 crore, SKS said. The company plans to increase its non-Andhra Pradesh portfolio outstanding from Rs 2364 crore as of December 2013 to Rs 3800 crore - Rs 4000 crore by the end of FY 2015, SKS said in a statement.
SKS also issued a profit guidance of Rs 125 crore for FY 2015. The profit guidance comes close on the heels of its recent announcement that there could be a positive surprise in its guided net profit of Rs 55-Rs 60 crore for FY 2014. The proposed capital raise of up to Rs 400 crore will fund such growth opportunities besides reinforcing the capital position of SKS which had a net worth of Rs 432 crore and a capital adequacy of 28.1% (21.6% without taking RBI dispensation on provisioning for the Andhra Pradesh portfolio) as of 31 December 2013. The company's cash and bank balances stood at Rs 809 crore, SKS said in a statement.
SKS said it believes that initiatives like Cross Sale which has been in pilot phase for a couple of years, will create greater value for all its stakeholders as the company plans to creatively disturb the asset-revenue-earning mix. The non-MFI business will be just 10% of the company's assets, but it could contribute 15% of the revenue and 25% of the profit in the medium term, the company said in a statement.
SKS also decided to realign its top structure in order to optimally spend management bandwidth on its reinvention, which will equip it fully to meet its long-term goals. As part of its restructuring exercise, the company plans to move the two present C-Level officials into strategic, mentoring roles but with complete accountability for business targets and new initiatives. Mr. M.R. Rao will continue as MD and CEO of the company. Mr. S Dilli Raj, presently CFO of the company to be promoted as President of the company. The two officials will spearhead new initiatives like Cross Sale, capital raise, creation of subsidiaries and building partnerships, the company said. Policy advocacy will be another major focus area, it added.
Mr. M.R. Rao, MD and CEO, SKS Microfinance said, "SKS Microfinance 2.0 was the result of our painstaking focus on Customer Protection Practices including 3% cap on return on assets in the MFI business, revamping of Customer Grievance Redressal mechanism, appointment of Ombudsman and 100% reliance on Credit Bureaus in processing loan applications. SKS Microfinance 3.0 will create customer and stakeholder delight as it creates a win-win situation for all as our pilot projects in areas like Mobile Loans have established".
Mr. S. Dilli Raj, CFO, SKS Microfinance said, "Now that Transformation A (fixing the core) is behind us, it is time to focus on Transformation B, that is, creation of new engines of growth. Our strong rural distribution and deep connect with 3 million non-Andhra Pradesh members will be used for delivery of quality products and services. The new paradigm is world-class customer service at a competitive price, and, in this regard, signing right partnerships, sourcing growth capital at the right time and striving for organization agility are key drivers. These will be hallmarks of SKS Microfinance 3.0, and we are confident of fast-tracking this transformation".
SKS Microfinance's net profit galloped 1763.5% to Rs 21.43 crore on 54.8% growth in total income to Rs 139.66 crore in Q3 December 2013 over Q3 December 2012.
SKS Microfinance is a non banking financial company - micro finance institution (NBFC-MFI), registered and regulated by the RBI, whose mission is to provide financial services to low-income households. SKS operates across 15 states of India. They include: Andhra Pradesh, Karnataka, Maharashtra, Odisha, Madhya Pradesh, Bihar, Uttar Pradesh, Rajasthan, Uttaranchal, Haryana, West Bengal, Jharkhand, Chhattisgarh, Kerala and Punjab.
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