Bangalore: SKS Microfinance, a Hyderabad based Microfinance institution has raised Rs 75 crore by issuing one year non-convertible debentures (NCD) at a coupon rate of 10 percent. The NCDs are listed on the Bombay Stock Exchange (BSE) and have been placed with the Standard Chartered Bank's Foreign Institutional Investments (FII). Standard Chartered also acted as the sole book runner and the lead arranger for the issue. This is country's first listed Non Convertible Debenture (NCD) Issue by a microfinance institution.
Dilli Raj, CFO, SKS Microfinance, says, "By listing the debt securities on the BSE, our reporting in the public domain increases. This shows that the organization is prepared for enhanced standards of governance, transparency and public accountability." The listing of the NCDs would help the organization in diversifying its sources bracket as this is a new avenue of funding for the firm, he explains.
Commenting on the impact of the transaction on SKS and the sector, Suresh Gurumani, MD & CEO of SKS Microfinance said, "This transaction enables us to diversify the sources base and access capital market funding. By listing the NCDs on the stock exchange, SKS raises the bar on transparency and governance standards for the sector as a whole."
Joseph Silvanus, Head of Development Organizations, South and South-East Asia, Standard Chartered Bank, said, "This deal is a key milestone in the industry, and consequently, Standard Chartered Bank, is proud to have facilitated it. The Bank has an agenda to support the growth of the microfinance sector in India, part of which is to help the sector broaden its fund raising base to support its rapid growth. Over a period of time, this is expected to reduce the cost of funds to the MFIs, which in turn will translate into more affordable funds for the ultimate borrower."