SKS Microfinance shares jumped nearly 3.71 per cent in the early trade on Wednesday after the company informed stock exchanges that MUDRA (Micro Units Development & Refinance Agency Limited ) has sanctioned a refinance line of Rs 100 crore at 10 per cent per annum to SKS Microfinance. (Photo: Reuters)
SKS Microfinance shares jumped nearly 4 per cent in the early trade on Wednesday after the company informed stock exchanges that MUDRA (Micro Units Development & Refinance Agency Limited ) has sanctioned a refinance line of Rs 100 crore at 10 per cent per annum to SKS Microfinance.
At 9.36 am, the share price of SKS Microfinance was trading 3.85 per cent up at Rs 415.55. The scrip opened at Rs 404 and had touched a high and low of Rs 416.10 and Rs 402.20, respectively, in trade so far.
MUDRA is launched by the Government of India for financing micro entrepreneurs engaged in small business activities like manufacturing, processing, service sector and trade.
This is the first refinance limit sanctioned to SKS Microfinance by MUDRA. The development is expected to contribute to bringing down the cost of interest-bearing liabilities at SKS Microfinance.
Earlier, with the cost of its interest-bearing liabilities dropping to 11.9 per cent in Q1-FY16 from 13.6 per cent in FY14 on account of downward adjustments in risk premium, the company could reduce the interest rate charged to borrowers on three occasions since October 2014. With an overall reduction of 3.8 per cent since October 2014, SKS Microfinance charges 20.75 per cent on all its disbursements with effect from October 1, 2015.
“This is the first refinance line availed by us,” said S Dilli Raj, president, SKS Microfinance in a release. “At a rate of 10 per cent, this is lower than regular term loans from conventional lenders, and reinforces our assertion in the recent past that the Non Banking Financial Company – Micro Finance Institution (NBFC -MFI) structure does not preclude us from availing dedicated refinance lines at a lower rate of interest. We are already the lowest cost lender in the MFI segment, and will pass on this benefit to our microfinance borrowers at an appropriate juncture.”
The BSE group ‘A’ stock of face value Rs. 10 has touched a 52 week high of Rs 589.50 on 31-Jul-2015 and a 52 week low of Rs 309.60 on 30-Oct-2014.
Last one week high and low of the scrip stood at Rs 437 and Rs 398, respectively. The current market capitalisation of the company is Rs 5,180 crore.
The promoters holding in the company stood at 6.31 per cent while institutions and non-institutions held 64.48 per cent and 29.21 per cent, respectively.
SKS Microfinance is a non-banking finance company (NBFC), registered and regulated by the Reserve Bank of India, whose mission is to provide financial services to low-income households. SKS operates across 16 states of India.
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