SKS Microfinance shares surge 11% despite Q1 loss

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Updated: Monday, August 6, 2012, 12:57 [IST]
 
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SKS Microfinance shares surge 11% despite Q1 loss

Shares of the SKS Microfinance company surged on Monday after the Reserve Bank of India modified norms governing microfinance institutions and the company's net loss for this quarter narrowed.

The shares of the company were seen trading at Rs 100.25, higher by 11.20% after reaching intra-day high of Rs 104.20 on BSE at 12.50 pm IST.

The RBI also relaxed provisioning norms for Andhra Pradesh portfolio. The provisioning on account of bad loans incurred by MFIs in AP will be included as part of net worth, the RBI said.

In a surprising move, RBI also removed the cap on micro lenders' lending rates. "To allow for operational flexibility, non-banking financial company- MFIs would ensure the average interest rate on loans during a financial year does not exceed the average borrowing cost during that financial year plus the margin, within the prescribed cap. Moreover, while the rate of interest on individual loans may exceed 26 per cent, the maximum variance permitted for individual loans between the minimum and maximum interest rates cannot exceed four per cent," RBI said.

SKS Microfinace reported net loss of Rs 39 crore for the June quarter against a loss of Rs 219 crore in the corresponding quarter of previous year.

We raised incremental debt of Rs 1,360 crore in Q4-FY12. The write-off of Rs 1,128 crore on the AP portfolio cleansed the balance sheet," said S Dilli Raj, Chief Financial Officer, SKS Microfinance.

GoodReturns.in

Topics: sks
Story first published:  Monday, August 6, 2012, 12:55 [IST]
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