Mumbai: Foreign investors raised their holdings in SKS Microfinance to an all-time high of 31.77% in the July-September quarter from a record low of 8.33% on 30 June.
The sharp increase in the shareholding of foreign institutional investors (FIIs) coincided with a 88% rally in the stock price of the Hyderabad-based SKS Microfinance between July and September.
The total promoter holding dropped to 29.58% during the quarter from 37.62% in the April-June quarter, according to information available with stock exchanges.
SKS Microfinance’s stock rallied by about 88% in the September quarter, after a plunge of 34% in the preceding three months.
The stock has taken a beating since its listing in August 2010 at a price of more than Rs.1,000 a share and is currently trading at near Rs.120. The company debuted on the exchanges after sale of shares in an initial public offer at a price of Rs.985 apiece.
Foreign investors that acquired shares in SKS during the September quarter include CLSA, Royal Bank Investment, Credit Suisse and Morgan Stanley.
Currently, CLSA (Mauritius) owns 8.77%, while Royal Bank Investment Partners (London) owns 4.62%. Morgan Stanley (Singapore) and Credit Suisse own 4.16% and 1.48%, respectively.
Analysts say a fresh infusion of capital through a qualified institutional placement in July as well as the company’s reduction of its exposure to its main state, Andhra Pradesh, have made SKS more attractive for foreign investors.
Moreover, SKS narrowed its losses in the second quarter to Rs.262 crore from Rs.384.5 crore in the year earlier because of a drop in bad debt provisions. The company’s operations were affected after Andhra Pradesh came up with regulations in October 2010 restricting lending and recovery.