SKS: Choose Your Community: Media

SKS Raises Rs 100 Crore through Non Convertible Debentures & Commercial Papers

Feb '2010

Breaks fresh ground yet again in MFI fund raising

Bajaj Allianz Life Insurance Company Limited subscribes to Rs 50 crore NCDs while Religare Asset Management Company Limited subscribes to Rs 50 crore Commercial Papers
Both instruments are rated highest for safety by CARE

Hyderabad, February 22, 2010: SKS Microfinance, India’s largest microfinance company, ranked by MIX Market, has raised Rs 100 crore by issuing Non Convertible Debentures worth Rs 50 crore to insurance major Bajaj Allianz Life Insurance Company Ltd. on December 23^rd, 2009. The Company has also issued Commercial Papers worth Rs 25 crore on November 24^th, 2009 and another tranche of Rs 25 crore on February 4^th, 2010 to Religare Asset Management Company. The unique transaction has enabled the country’s first Non Convertible Debenture (NCD) issued by a microfinance institution to an insurance company. Both the NCDs and Commercial Papers are rated a high PR 1+ by CARE. The PR1 + rating indicates highest degree of safety with regard to timely payment of interest and principal on the instrument is strong.

Announcing the transactions, S. Dilli Raj, Chief Financial Officer, SKS Microfinance, said, ““Both these transactions i.e subscription to Non Convertible Debentures of SKS by an Insurance company and also Debt placement with a Mutual Fund marks the coming of age of microfinance as an asset class and should help SKS to diversify the sources basket”

Sashi Krishnan, CIO, Bajaj Allianz Life Insurance Company Ltd., said, "We are delighted to invest in SKS. Bajaj Allianz supports the growth of the micro-insurance sector in India and one of the ways is to help the sector broaden its fund raising base to support its rapid growth.”

The Commercial Paper is in accordance with RBI’s Non-Banking Companies Directions 1989 and in line with stipulations of the Fixed Income Money Market and Derivatives Association of India (FIMMDA), an Association of Commercial Banks, Financial Institutions and Primary Dealers. FIMMDA is a voluntary market body for the bond, Money And Derivatives Markets.

SKS Microfinance has in recent times announced a series of fund raising exercises including like rated pool assignment, assigning its weaker section portfolio, issuance of Non Convertible Debentures, Commercial Papers and listed debt securities etc. All of these are aimed at expanding the funding options available to SKS.

About SKS Microfinance

SKS Microfinance is a non-banking finance company (NBFC) registered and regulated by the Reserve Bank of India, whose mission is to eradicate poverty by providing financial services to the poor. Established in 1998, SKS Microfinance is India’s largest microfinance organization. As per audited results of September 30, 2009, we have served 53 lakh members across 19 Indian states and have a loan outstanding of INR 28,011.08 million in loans with a 99.1 % repayment rate.

SKS operates in the states of Andhra Pradesh, Karnataka, Maharashtra, Orissa, Madhya Pradesh, Bihar, Uttar Pradesh, Rajasthan, Uttaranchal, Himachal Pradesh, Haryana, West Bengal, Jharkhand, Chhattisgarh, Gujarat, Kerala, Tamil Nadu, Punjab and Delhi.

SKS has previously received awards which includes the Social and Corporate Governance Award issued by BSE and Nasscom Foundation for Best Corporate Social Responsibility Practice (2007), Social Performance Reporting Award (MFIs) - Silver Category for Social Performing rating conducted by MIX market (2009).. It was founded by Dr Vikram Akula, who is one among the Young Global Leaders selected by World Economic Forum. He was named by TIME magazine as one of the 100 Most Influential People in the World (2006).