SKS Microfinance Ltd plans to raise up to ₹400 crore in the next financial year with a maximum dilution of 20 per cent equity to meet funding requirements for its growth plans.
The business strategy has been termed as ‘SKS Microfinance 3.0 plan’.
Win-win for allThis would address the demand among its customers for an entire range of products and services, including insurance, mobile loans and loans for solar lights, besides micro credit.
“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 such as mobile loans have established,” its Chief Executive Officer and Managing Director MR Rao said in a release on Wednesday.
Before the Andhra Pradesh microfinance crisis of 2010, the non-Andhra Pradesh portfolio outstanding of the microfinance sector was ₹28,300 crore. This stood at ₹18,596 crore as of September 2013 - a huge gap of ₹9,704 crore.
The company plans to increase its non-Andhra Pradesh portfolio outstanding from ₹2,364 crore as of December 2013 to ₹3,800-4,000 crore by the end of FY15.
The company also issued a profit guidance of ₹125 crore for FY15. For the present financial year, it was to the tune of ₹55-60 crore for FY14.
RestructuringThe non-MFI business will be 10 per cent of its assets, but it could contribute 15 per cent of the revenue and 25 per cent of the profit in the medium term, SKS said.
SKS Microfinance has also decided to realign its top structure in order to optimally spend management time. MR Rao would continue as Managing Director and CEO of the company while S Dilli Raj, presently Chief Financial Officer, would be promoted as president.
The two officials would look after new initiatives such as cross sales, capital raising, creation of subsidiaries and building partnerships. Policy advocacy will be another major focus area.
On Wednesday, the SKS scrip gained marginally to end at ₹179.25 on the BSE.