SKS Microfinance OK’s share sale

SKS Microfinance has received a nod to raise funds from share sale to institutional investors.

SKS Microfinance,India’s only publicly listed microfinance company,has received a nod from its board to raise up to Rs 9 bn ($183 million) from share sale to institutional investors.

The board has also approved an increase in the authorized share capital from 950 million rupees to 1.35 billion rupees, according to a company statement released to the stock exchanges on Wednesday.

SKS,backed by investor George Soros,among others,went public last August in a successful initial public offering and raised $358 million.

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But,the company along with the rest of the industry has since run into rough weather after a regulatory crackdown last October by the southern state of Andhra Pradesh,which at the time happened to be the largest market for microfinance in the country.

In recent weeks,funding to micro lenders that do not have a presence in the state of Andhra Pradesh has started to trickle in,but microfinance institutions with a significant exposure to loans in the state have all but suspended operations there.

India’s MFIs continue to await the passage of a bill in parliament,which will make the country’s central bank the sole regulator of the sector,and remain hopeful this will bring funds flowing back into the sector.

At 1.43 p.m.,shares of SKS were trading up about 2 percent at 202.85 rupees in a positive market on Wednesday afternoon.