Shares of SKS Microfinance on Friday touched their highest in nearly 13 months on the BSE after it announced completion of a Rs 54.48-crore securitisation deal.

The company’s share touched a high of Rs 178 during the day, which is its 52-week high on the BSE. It, however, shed gains to close at Rs 168.70, down by 2.34 per cent.

Last month, the company sold a portfolio of loans worth Rs 200 crore that enabled it raise fresh funds for growth. This was the first securitisation deal after the revision of guidelines for non-banking finance companies by RBI in August. It stipulated a minimum holding period of three months and minimum retention requirement of five per cent.

Loan pools are sold by financial institutions for an upfront fee to release capital for fresh lending.

In Friday’s deal, SKS securitised the receivables from 64,579 micro loans extended to rural women entrepreneurs after downloading them to a Special Purpose Vehicle.

Generating interest

“The present transaction indicates that it is possible to generate interest outside the banking system also for a well-originated microfinance paper,” S. Dilli Raj, Chief Financial Officer, said.

He added that the pool was well diversified with the top three States contributing 45.38 per cent and the top ten branches about 4.85 per cent of the pool principal, with the average loan amount being Rs 11,572.

The pool is rated by one of the leading rating agencies, which has awarded the ‘Highest Safety Rating’, the company said in a statement.

Till November end, the company completed 16 assignment or securitisation transactions worth Rs 1,850 crore since October 2010. The micro finance industry in Andhra Pradesh was plunged into a crisis after reported suicides by borrowers and the subsequent promulgation of an Ordinance by the State Government.

(This article was published on December 7, 2012)
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