The initial public offering (IPO) of SKS Microfinance opened for subscription. The company is offering 168 lakh equity shares through this IPO, which will close on August 2. IIFL has recommended subscribing the issue.
The price band for the issue is at Rs 850-985 per share. Book will close today for QIBs while it will remain opened till August 2 for retail & non-institutional investors.
The report says, "SKS Microfinance (SKSMF) is the largest microfinance company in India with loan portfolio of nearly USD 1 billion, 2,000+ branches spread across 19 states and 6.8mn members. Its strengths include pan-India presence, scalable operating model, diversified product revenues and access to various sources of capital. Lending primarily to poor women, the business model involves village centered group lending, thereby ensuring a check on asset quality. The huge demand-supply credit gap and inability of banks to penetrate into unbanked areas have driven the growth of microfinance industry. While valuations appear expensive, the scalable business model, market leadership position and high earnings growth provide comfort. Recommend Subscribe."
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