Stocks

RBI panel advice boosts SKS Microfinance

Our Bureau Mumbai | Updated on January 25, 2011 Published on January 25, 2011

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After being beaten down over the last three months, the SKS Microfinance Ltd's scrip on Thursday gained almost 4 per cent (or Rs 25.70) on the Bombay Stock Exchange to close at Rs 695.25, compared with the previous close of Rs 668.55.

The stock gained traction following the RBI-appointed Malegam sub-committee giving positive recommendations to revive the fortunes of the beleaguered microfinance institutions sector, say market analysts.

On Thursday, the number of trades in the SKS scrip shot up to 63,387 (6,501 on Wednesday) and the total turnover surged to Rs 120.67 crore (Rs 11.52 crore).

On November 16, the SKS Microfinance scrip recorded its biggest single day fall of 11.55 per cent (or Rs 104.40) to close at Rs 799.25, due to persistent investor concerns about the operations of microfinance institutions getting hobbled due to the ordinance passed by the Andhra Pradesh Government.

SKS' scrip has been pummelled over the last three months, after corporate governance issues cropped up with MD & CEO Mr Suresh Gurumani being asked to go.

The woes for the country's only listed micro-finance firm, began after the Andhra Pradesh Government passed an ordinance in October imposing severe restrictions on the functioning of all MFIs in the State. The ordinance was passed as it came to light that recovery methods employed by MFIs lead to suicides by rural poor.

Following the Ordinance, interest rates to the borrowers have been capped, recoveries have come to a standstill and all tranches of repayment have to be made by self help groups at the office of the Gram Panchayat only.

> kram@thehindu.co.in

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Published on January 25, 2011
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