Mumbai: SKS Microfinance, the Indian lender backed by Sequoia Capital, plans to raise about $250 million (Dh917.5 million) in the first initial public offering by a financier for the nation's poorest people.
SKS, one of India's largest microfinance company, plans to sell 16.8 million shares, according to its share-sale document. Citigroup, Credit Suisse Group and Kotak Mahindra Capital are managing the sale, it said.
The Hyderabad-based company provides loans from $22 to $260 each for women raising cows or opening a village tea stall in a nation where 828 million people live on less than $2 a day. About 120 million households in India don't have access to banking and financial services, leading to an untapped credit demand of Rs1.2 trillion (Dh96 billion), according to Crisil Ratings.
Fragmented
Microfinance is a fragmented industry in India, with more than 3,000 companies offering such loans, according to Crisil, the Indian unit of Standard & Poor's. The top 10 small-scale lenders account for about 74 per cent of small loans in India.
Menlo Park, California-based venture capital firm Sequoia, one of Google and Yahoo!'s early investors, began buying stakes in SKS in March 2007 for Rs49.77 a share. It now plans to sell about 4 million shares, or less than a third of its stake, according to the filing made to India's capital- markets regulator on March 25.
SKS' more recent investors include Catamaran Management Services, a fund started by Indian billionaire N.R. Narayana Murthy. That fund invested Rs281.3 million in SKS in January, buying shares for Rs300 apiece, according to data compiled by Bloomberg from the share-sale document. Other stakeholders include Bajaj Allianz Life Insurance.
