Bank Of Baroda , Third largest Public Sector bank in India,
after State Bank of India and Punjab National Bank
Founded in 1908
Headquartered at Baroda
It has total of 3159 branches including 70 overseas
Has a total staff of 38063
CMD of BOB is M.D.Mallaya
A MS PowerPoint presentation that contains an idea about what Indian banking structure looks like and what role ICICI has played in the development of market infrastructure. It also contains Grievance Redressal system and controversies in which ICICI bank's name was highlighted
Bank Of Baroda , Third largest Public Sector bank in India,
after State Bank of India and Punjab National Bank
Founded in 1908
Headquartered at Baroda
It has total of 3159 branches including 70 overseas
Has a total staff of 38063
CMD of BOB is M.D.Mallaya
A MS PowerPoint presentation that contains an idea about what Indian banking structure looks like and what role ICICI has played in the development of market infrastructure. It also contains Grievance Redressal system and controversies in which ICICI bank's name was highlighted
The bank, established in 1984 in Sion, central Mumbai, has branches in six states but most of them are concentrated in Mumbai and Delhi.
On September 24, the bank’s managing director, Joy Thomas, had sent a text message to depositors about the RBI’s regulatory restrictions capping withdrawals up to Rs 1,000 for six months.
Thomas has since been arrested, along with the promoters of the Housing Development Infrastructure Limited (HDIL), Rakesh and Sarang Wadhawan, in an alleged fraud case.
Study of of working capital management in kotak mahindra bankManali Tendolkar
This project is base on day to day transaction on the business and how they manage it. Also given a information about the advantages growth and development in financial sector and the economy.
Customer satisfaction level towards the service provided by the co operative ...Pritesh Radadiya
In this report all services of the SHREE RAJKOT DISTRICT CO-OPERATIVE BANK. Like loan facility, locker facility, fixed deposit facility and followed by other services provided by the bank have been analyzed and rehired with the help of primary data.
We have tried our level best to include each and special features of SHREE RAJKOT DISTRICT CO-OPERATIVE BANK. in this report.
Each part begins with an introduction section to know what actually does it means.
The very first part of the report starts with the history of banking and followed by the company’s information and analysis of primary data.
The Indian post payment was setuped in 30 Jan 2016
Headquarter is situated in new Delhi
There was a plan to setup around 650 post payments bank branches
Indian Microfinance - Looking Beyond The AP Act and its Devastating Impact on...hamishbanks
The paper documents the disastrous consequences of legislation passed by Government of Andhra Pradesh in December 2010, and how this has brought about a national crisis. The legislation - the AP Act - not only undermines India’s financial inclusion agenda but also punishes the poor in every state across India. We welcome and encourage the swift passage of the upcoming microfinance Bill through Parliament, which should ultimately supersede the AP Act. While the Bill must be passed at the earliest to avoid further damaging the lives of India’s poor, the report highlights provisions in the Bill and recent RBI circular on NBFC-MFIs that threaten to undermine the Bill’s intentions. Finally, it examines the important role of the private sector in contributing to the challenge of facilitating financial inclusion to India’s 450 million unbanked citizens.
The bank, established in 1984 in Sion, central Mumbai, has branches in six states but most of them are concentrated in Mumbai and Delhi.
On September 24, the bank’s managing director, Joy Thomas, had sent a text message to depositors about the RBI’s regulatory restrictions capping withdrawals up to Rs 1,000 for six months.
Thomas has since been arrested, along with the promoters of the Housing Development Infrastructure Limited (HDIL), Rakesh and Sarang Wadhawan, in an alleged fraud case.
Study of of working capital management in kotak mahindra bankManali Tendolkar
This project is base on day to day transaction on the business and how they manage it. Also given a information about the advantages growth and development in financial sector and the economy.
Customer satisfaction level towards the service provided by the co operative ...Pritesh Radadiya
In this report all services of the SHREE RAJKOT DISTRICT CO-OPERATIVE BANK. Like loan facility, locker facility, fixed deposit facility and followed by other services provided by the bank have been analyzed and rehired with the help of primary data.
We have tried our level best to include each and special features of SHREE RAJKOT DISTRICT CO-OPERATIVE BANK. in this report.
Each part begins with an introduction section to know what actually does it means.
The very first part of the report starts with the history of banking and followed by the company’s information and analysis of primary data.
The Indian post payment was setuped in 30 Jan 2016
Headquarter is situated in new Delhi
There was a plan to setup around 650 post payments bank branches
Indian Microfinance - Looking Beyond The AP Act and its Devastating Impact on...hamishbanks
The paper documents the disastrous consequences of legislation passed by Government of Andhra Pradesh in December 2010, and how this has brought about a national crisis. The legislation - the AP Act - not only undermines India’s financial inclusion agenda but also punishes the poor in every state across India. We welcome and encourage the swift passage of the upcoming microfinance Bill through Parliament, which should ultimately supersede the AP Act. While the Bill must be passed at the earliest to avoid further damaging the lives of India’s poor, the report highlights provisions in the Bill and recent RBI circular on NBFC-MFIs that threaten to undermine the Bill’s intentions. Finally, it examines the important role of the private sector in contributing to the challenge of facilitating financial inclusion to India’s 450 million unbanked citizens.
Impact of microfinance on the indian economyMeghana Bhogle
This is a presentation i made for my first year as a management student. An overview of micro-credit and it's advantages as also the various organizations that help facilitate the same
a few slides to explain trust banks, based on info from Opportunity International Australia, part of my voluntary ambassadorship between now and June 09 http://awomansinvestment.blogspot.com
NBFC - Non Banking Financial Company/ Non Banking Financial Corporation are companies registered under the Companies Act, 1956
Engaged in the business of
- loans and advances
-acquisition of shares
-stocks
-bonds
-debentures
-securities
but does not include any institution whose principal business is that of agriculture activity, industrial activity, purchase or sale of any goods (other than securities) or providing any services and sale/purchase/construction of immovable property
Non Banking Financing Companies PresentationAnkur Aggarwal
Non-bank financial companies ( NBFCs ) are financial institutions that provide banking services without meeting the legal definition of a bank, i.e. one that does not hold a banking license. These institutions typically are restricted from taking deposits from the public depending on the jurisdiction. Nonetheless, operations of these institutions are often still covered under a country's banking regulations.
Enterslice help you to Incorporate NBFC Company in india.we also provide software to manage NBFC Business like NBFC Software,NBFC-ND Compilance,Money Changer Compilance,funding in NBFC and takeover of NBFC.
A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 2013 or 1956 carrying on the business listed under Section 45 I (c ) of the RBI Act, 1934, i.e.
August 2015 Edition of BEACON, A Monthly Newsletter by SIMCON.
Inside this issue:
About Us
Our Team
INDUSTRY ANALYSIS : NBFC Industry
COMPANY ANALYSIS : HDFC Bank
BRAND ANALYSIS : Rolex
Concept of the month: Pricing Myopia
Corporate India - Distress Resolution Solutions Sumedha Fiscal
The Indian Banking scenario is going through unprecedented times with stressed loan portfolio. The portfolio of all Banks put together is more than 7 lakh crore which is > 10% of total advances and there is an apprehension that there could be significant additions too.
Realizing the problem RBI has come out with many changes and schemes to tackle such stressed accounts.
Here are come of the distress resolution solutions that you can look into.
Complete Guide on NBFC (Non-Banking Financial Company) RegistrationASC Group
NBFC stands for Non-Banking Financial Company. It is a financial institution that provides banking services without having a banking license. NBFCs typically provide a wide range of financial services, such as lending, investments, financial leasing, hire purchase, insurance, and other related activities.
Making NBFCs relevant to ‘Make-in India’& ‘Start-up India, Stand-up India’ - ...Resurgent India
The dynamic and evolving NBFC sector necessitates reforms and evolution to ensure orderly growth. While NBFCs have been on the growth trajectory over the years, there are few areas of concern which need to be addressed. The key challenges have been highlighted below:
Yes of course, you can easily start mining pi network coin today and sell to legit pi vendors in the United States.
Here the telegram contact of my personal vendor.
@Pi_vendor_247
#pi network #pi coins #legit #passive income
#US
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the Telegram username
@Pi_vendor_247
The secret way to sell pi coins effortlessly.DOT TECH
Well as we all know pi isn't launched yet. But you can still sell your pi coins effortlessly because some whales in China are interested in holding massive pi coins. And they are willing to pay good money for it. If you are interested in selling I will leave a contact for you. Just telegram this number below. I sold about 3000 pi coins to him and he paid me immediately.
Telegram: @Pi_vendor_247
how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
USDA Loans in California: A Comprehensive Overview.pptxmarketing367770
USDA Loans in California: A Comprehensive Overview
If you're dreaming of owning a home in California's rural or suburban areas, a USDA loan might be the perfect solution. The U.S. Department of Agriculture (USDA) offers these loans to help low-to-moderate-income individuals and families achieve homeownership.
Key Features of USDA Loans:
Zero Down Payment: USDA loans require no down payment, making homeownership more accessible.
Competitive Interest Rates: These loans often come with lower interest rates compared to conventional loans.
Flexible Credit Requirements: USDA loans have more lenient credit score requirements, helping those with less-than-perfect credit.
Guaranteed Loan Program: The USDA guarantees a portion of the loan, reducing risk for lenders and expanding borrowing options.
Eligibility Criteria:
Location: The property must be located in a USDA-designated rural or suburban area. Many areas in California qualify.
Income Limits: Applicants must meet income guidelines, which vary by region and household size.
Primary Residence: The home must be used as the borrower's primary residence.
Application Process:
Find a USDA-Approved Lender: Not all lenders offer USDA loans, so it's essential to choose one approved by the USDA.
Pre-Qualification: Determine your eligibility and the amount you can borrow.
Property Search: Look for properties in eligible rural or suburban areas.
Loan Application: Submit your application, including financial and personal information.
Processing and Approval: The lender and USDA will review your application. If approved, you can proceed to closing.
USDA loans are an excellent option for those looking to buy a home in California's rural and suburban areas. With no down payment and flexible requirements, these loans make homeownership more attainable for many families. Explore your eligibility today and take the first step toward owning your dream home.
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
Lecture slide titled Fraud Risk Mitigation, Webinar Lecture Delivered at the Society for West African Internal Audit Practitioners (SWAIAP) on Wednesday, November 8, 2023.
when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the telegram contact of my personal pi vendor
@Pi_vendor_247
BYD SWOT Analysis and In-Depth Insights 2024.pptxmikemetalprod
Indepth analysis of the BYD 2024
BYD (Build Your Dreams) is a Chinese automaker and battery manufacturer that has snowballed over the past two decades to become a significant player in electric vehicles and global clean energy technology.
This SWOT analysis examines BYD's strengths, weaknesses, opportunities, and threats as it competes in the fast-changing automotive and energy storage industries.
Founded in 1995 and headquartered in Shenzhen, BYD started as a battery company before expanding into automobiles in the early 2000s.
Initially manufacturing gasoline-powered vehicles, BYD focused on plug-in hybrid and fully electric vehicles, leveraging its expertise in battery technology.
Today, BYD is the world’s largest electric vehicle manufacturer, delivering over 1.2 million electric cars globally. The company also produces electric buses, trucks, forklifts, and rail transit.
On the energy side, BYD is a major supplier of rechargeable batteries for cell phones, laptops, electric vehicles, and energy storage systems.
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
how to swap pi coins to foreign currency withdrawable.DOT TECH
As of my last update, Pi is still in the testing phase and is not tradable on any exchanges.
However, Pi Network has announced plans to launch its Testnet and Mainnet in the future, which may include listing Pi on exchanges.
The current method for selling pi coins involves exchanging them with a pi vendor who purchases pi coins for investment reasons.
If you want to sell your pi coins, reach out to a pi vendor and sell them to anyone looking to sell pi coins from any country around the globe.
Below is the contact information for my personal pi vendor.
Telegram: @Pi_vendor_247
1. Group-3
Roll No Name
A037 Akshiv Pathania
A045 Apoorv Sarwahi
A047 Sameer Sehgal
A050 Karan Shah
A051 Kush Sharma
2. Agenda
NBFC: Introduction
Regulations
Micro Finance Industry : Overview
SKS MicroFinance: Overview & Business
Malegam Committee Recommendations
SKS: Valuation
Auction
IPO Launch
Turnaround
Financial Statements : 2008-14
Performance analysis: Post- IPO Period
New Initiatives
Latest Developments
3. NBFC : Introduction
A Non-Banking Financial Company (NBFC) is a company
Registered under the Companies Act, 1956
Its principal business is lending, investments in various types of
shares/stocks/bonds/debentures/securities, leasing, hire-purchase, insurance business, chit
business
Its principal business is receiving deposits under any scheme or arrangement in one lump
sum or in instalments
Entry Point Norms (in effect since April 1999):
i. All new NBFCs were required to have a minimum NOF of Rs. 2 crore in order to register
with the RBI
ii. Minimum asset size of Rs. 25 crore
iii. Fulfils the Principal Business Criteria (PBC):
a) A company not accepting deposits, will qualify for registration as NBFC if and when its
financial assets aggregate Rs 25 crore and constitute 75 per cent and above of its
total assets and financial income constitutes 75 per cent or above of its gross income
b) Financial entities having asset size of Rs.1000 crore or above, holding financial assets
which constitute 50% of the total assets OR generate financial income which as a
proportion of the gross income is at least 50%, will need to be registered and
regulated by the Bank
4. Categories of NBFC
Categories of NBFCs
1. Asset Finance Company (AFC)
2. Investment Company (IC)
3. Loan Company (LC)
4. Infrastructure Finance Company (IFC)
5. Core Investment Company (CIC)
6. Infrastructure Debt Fund- Non-Banking Financial Company (IDF-NBFC)
7. Non-Banking Financial Company - Micro Finance Institution (NBFC-MFI)
An NBFC-MFI is a non deposit taking NBFC that fulfils the following
conditions:
1. Minimum Net Owned Funds of Rs.5 cr ore. (For NBFC-MFIs registered in the North East Rs. 2
crore )
2. Not less than 85% of its net assets are in the nature of qualifying assets
3. Further the income an NBFC-MFI derives from the remaining 15 percent of assets shall be in
accordance with the regulations specified in that behalf
4. An NBFC which does not qualify as an NBFC-MFI shall not extend loans to micro finance
sector, which in aggregate exceed 10% of its total assets
5. Regulations for NBFC-MFI
Capital Adequacy ratio:
Maintain a capital adequacy ratio of atleast 15%.
The total of Tier II Capital at any point of time, shall not exceed 10 0 percent of Tier I Capital
Asset Classification Norms
Standard asset: No default in repayment of principal or payment of interest
Nonperforming asset: Interest/principal payment has remained overdue for a period of 90
days or more
Standard assets - Overdue for less than 8 weeks
Sub-standard assets - Overdue for more than 8 weeks upto 25 weeks
Loss assets - Overdue for more than 25 weeks
The aggregate loan provision to be maintained by NBFC-MFIs at any point of time shall not be less
than the higher of:
1% of the outstanding loan portfolio
50% of the aggregate loan instalments which are overdue for more than 90 days and less than 180 days and
100% of the aggregate loan instalments which are overdue for 180 days or more
All NBFC-MFIs shall maintain an aggregate margin cap of not more than 12%
With effect from 1st April, 2014 margin caps as defined by Malegam Committee may not exceed
10 per cent for large MFIs (loans portfolios exceeding Rs.100 crore) and 12 per cent for the others.
6. Regulations for NBFC-MFI
Formation of Self-Regulatory Organization (SRO)
The Malegam Committee recommends greater responsibility on industry associations
All NBFC-MFIs will have to become member of at least one SRO recognized by the RBI and
comply with the Code of Conduct prescribed by the SRO
To be recognised as an SRO, it should have independent directors comprising at least a third
of its board, representation of both small and large micro-lenders on the governing council, a
compliance officer employed and paid by the SRO but directly responsible to the RBI
7. Growth Phases of Indian Microfinance
Sector
Phase I -
Growth
• Characterised by High Growth
• Large availability of funds including debt and equity
• Low entry barriers
• Ended with AP ordinance in October 2010
Phase II -
Volatility
• Highly volatile period from October 2010 till 2011
•MFIs experienced funding constraints
• Deterioration in asset quality
Phase III -
Consolidation
• Consolidation phase in operations by MFIs with regulatory intervention in 2011
• Curtailed expansion plans and changed business model
• Resumption of funding from banks and equity infusion from PE/social sector funds
Phase IV –
Stable Growth
• Stable growth expected with regulatory framework in place
• Other State governments not following the AP ordinance route
•Margins are expected to stabilize and profitability improve
9. SKS Microfinance: Overview
Constraints: (3 C’s)
Lack of Capital
Capacity constraints
High Cost of delivering micro-loans
1997
• Swayam Krishi Sangam
– SKS NGO
1998
• 1st Loan
2002
• ~5000 borrowers
2005
• NGO to for profit- NBFC
2007
• Half a Million
customers
2010
• IPO Launch
Innovative Principles:
Profit- Oriented Model
Leveraging Industry Best Practices
Technology for Automation
Performance :
3rd largest MFI
Operations in ~300 districts
5,021,000 members in FY13
Portfolio outstanding ~ INR 2350 Cr
in FY13
10. SKS Microfinance: Business Model
Joint Liability Groups:
Pioneered by Grameen Bank
Lending to individual women,
utilizing five member groups
where groups serve as the
ultimate guarantor for each
member
High Repayment Ratio of 98%
Because of Social Pressure
Group
Formation
Sangam
Formation
&
Borrowing
Member
invests in
enterprise
s
Sangam
Size
Increases
Repaymen
t of Loans
Product Portfolio:
Income Generation Loan
Mid Term Loan
Mobile Loan
Gold Loan
Housing Loan
Characteristics:
Small Ticket loans
Short duration loans
Higher rate of interest
High Frequency of Repayment
11. Malegam Committee
RBI formed a sub-committee on October 15, 2010.
Consisted of 6 members including Shri Y. H. Malegam and Shri
Kumar Mangalam Birla.
Microfinance is an economic development tool whose
objective is to assist the poor to work their way out of poverty.
It covers a range of services which include, in addition to the
provision of credit, many other services such as savings,
insurance, money transfers, counseling, etc
The committee focused on provision of credit.
12. Recommendations
Recommendation #1: New Category of NBFC called NBFC MFIs
“A company (other than a company licensed under Section 25
of the Companies Act, 1956) which provides financial services
pre-dominantly
to low-income borrowers
with loans of small amounts,
for short-terms,
on unsecured basis,
mainly for income-generating activities,
with repayment schedules which are more frequent than those
normally stipulated by commercial banks and
which further conforms to the regulations specified in that behalf”
13. Recommendations
Recommendation #2: NBFC to satisfy certain conditions to be
classified as NBFC MFI
Not less than 90% of its assets are in the qualifying assets
Loan given to individual whose income does not exceed Rs 50,000/annum
The amount of loan doesn’t exceed Rs 25,000 and total outstanding
indebtedness doesn’t increase by Rs 25,000
The tenure of the loan is greater than 12 months for loan till Rs 15,000 and 24
months for others
The loan is without collateral
The loan is repayable by weekly, fortnightly or monthly
The income it derives from remaining assets should be in accordance with
the norms
NBFC which is not a NBFC-MSI should not be permitted to give loans to
the microfinance sector, which in aggregate exceed 10% of its total assets.
14. NABARD
It was established on recommendation of Shivaraman
Committee on July 12, 1982 to implement NBARD Act 1981.
It replaced the following
Agricultural Credit Department (ACD) and Rural Planning and
Credit Cell (RPCC) of RBI
Agricultural Refinance and Development Corporation (ARDC)
RBI sold its 71.5% stake in NABARD to the GOI which holds 99%
stake in 2010.
NABARD is the apex institution in the country which looks after
the development of the cottage industry, small industry and
village industry, and other rural industries.
15. Valuation
Requirement of Additional Capital:
Fast growth of customers
Equity financing requirement jumped to $12 mn in 2009
Regulations to maintain CAR of 9%
25% of equity should be held by Indian investors
SKS decided to conduct an auction & made a list of potential investors.
How to set a Valuation for SKS ?
Use comparable firms
Non-availability
Hire an Investment Banker
Lack of experience in MFI sector
Senior management built their own model to set a value.
16. Valuation
Branch Valuation model:
Approach:
Build simple model of branch earnings
Consider how this value will change as branch matures
Estimate growth rate of no. of new branch and HQ expenses to
calculate future earnings
Inputs :
Average size of Loan,
Growth parameters – New clients and Branches, Loan Size
Output:
Projected Balance sheet and Income Statement
Challenges:
Difficult to predict forecasting growth rate
17. Branch Valuation Model
Expense:
Financing Cost:
Cost of borrowings: 15% p.a.
Provisions for loan loss: 2% p.a.
SG&A Expenses per branch :
Branch Operations:
• Salaries: Rs. 2,28,000 p.a.
• Bonus : up to 60% of salaries
• Other : Rs. 2,49,600 p.a.
• CapEx : Rs. 1,22,000 p.a.
HQ operations:
• Executive Salaries, MIS, HR &
Audit : Rs. 2,16,00,000 p.a.
Income:
LPF : 1-2%
Rate of Interest: Average 23.6%
Interest Margin: ~ 8%
Assumptions:
No. of Clients: 4000
Avg. Size of loan : Rs. 7000
Loan size growth rate: 0 %
Tax rate : 35%
Terminal Growth rate: 5% after 2
years
Rate of Discount: 16%
Final Value using WACC approach: ~Rs. 400 mn ($ 8 mn)
Based on this primary value, SKS asked potential investors to bid to get equity stake.
Bidder has to submit term sheet which consists of his/her valuation of company and
desired share of the post-money firm.
18. Auction: Offers and Terms
Name Pre- Money
Valuation(USD
Millions)
Amount of
investment
(USD Millions)
Desired Stake Terms
Bombay
Brokers
18.3 3 11.41% None
Global Bank 15.5 8 34% IPO in 36
months
Sequoia 15.3 8 34.78% Preferred Stock
India Ventures 10 3.5 NA None
Tri Partners 14 2.25 10.25% IPO in 60
months
Highest Valuation offered with a minimum stake of 11.41%
No terms and Conditions
No mentorship and contacts
Did not meet the funding requirements
Desired one of the highest stake as compared to the bidders
The funding met the SKS requirement
Terms of coming with an IPO in 36 months
Desired the highest stake as compared to the bidders
The funding met the SKS requirement
Terms of having a preferred stock arrangement
Desired the lowest stake
Tri Partners had a condition to come up with an IPO in 60 months
Did not meet the funding requirements
Funding would increase the leverage of SKS
19. Qualitative Comparison
Criteria Bombay Brokers Global Bank Sequoia India Ventures Tri Partners
SKS scaling 1 4 4 3 3
Domestic Equity 5 1 4 2 2
Comfort 1 2 5 5 5
Low interference 5 2 2 2 2
Investments in
other MFIs
1 4 1 1 1
Control 1 3 4 2 2
Commitment to
Social Mission
1 3 2 2 2
Brand
Recognition
1 4 5 3 3
Presence in India 4 1 4 3 3
Desired Stake 1 4 5 1 2
Total 21 28 36 24 25
Rating Scale used 1 to 5 where 1 is the lowest score and 5 being the highest score
20. SKS IPO
Date of the IPO: 28 July to 2 August 2010
First day of Trading: 16 August 2010
Issue Size: US$350 million, of which US$155 million were fresh equity shares and
US$195 million, were stock sales from existing shareholders representing a
combined total of 23.3 percent of post-IPO shares.
Market Capitalization of SKS: US$1,525 million (as of IPO close on 2 August 2010)
Structure: 60 percent of shares sold to institutional investors (qualified
institutional buyers [QIBs]), 30 percent to retail investors, and 10 percent to non
institutional investors, primarily high net worth individuals.
Promoters: MBTs, Kismet, Sequoia Capital and Unitus
Anchor Investors: SKS secured an initial US$64 million from a group of 18 anchor
investors who agreed to buy 18 percent of the offering at the top of the offering
window of INR 985 per share. The anchors included JP Morgan, Morgan Stanley,
India ICICI Prudential, Reliance Mutual Fund, and George Soros’ Quantum Fund.
They are required to hold the shares for at least 30 days.
Stock Exchanges: Bombay Stock Exchange (BSE) and National Stock Exchange (NSE)
Trading Symbol: SKSMICRO
21. 2010 Crisis & Turnaround Strategy
Factors that led to 2010 Crises :
A hyper-competitive environment devoid of regulation,
High interest rates generating abnormal returns,
Debt accumulation compounded by multiple borrowing – (Average borrower’s debt
balance more than doubled),
MFI’s focus for-profit mainstream operations did not gel with the claim of eradicating
poverty
Intense Competition and no price war led to process dilution – (400-600 companies and
everyone was charging 31-32%)
End Result - The entire MFI sector was engulfed in widespread allegations of harassment
of clients by recovery agents and borrower suicides in AP
Andhra Pradesh Micro Finance Institutions (Regulation of Money lending) Act, 2010
The key features of the Bill were :
• All MFIs should be registered with the district authority.
• No person should be a member of more than one SHG.
• All MFIs shall make public the rate of interest charged by them on the loans extended.
• There would be a penalty on the use of coercive action by the MFIs.
• Any person who contravenes any provision of the Ordinance shall be punishable with
imprisonment for a period of 6 months or a fine up to the amount of Rs 10,000, or both.
22. 2010 Crisis & Turnaround Strategy
Dark times for SKS Microfinance
SKS Microfinance Ltd saw a 91% erosion of its share value from its peak on 28
September 2010 till 2013.
It experienced Drop off in loan collections and a drying up of funding
Its loan portfolio in A.P shrunk to zero in 2nd quarter of 2013 from a high of Rs. 1,491
crore at the start of crisis in October 2010.
Collection levels in AP dropped to 5%, forcing SKS to shrink its loan book in other states
and use the money to provide for the AP bad loans.
SKS reported a loss of Rs 1,360 crore in FY12.
Exit of Vikram Akula after Andhra Pradesh Micro Finance Institutions Act, 2010
Turnaround of SKS Microfinance
On account of the turnaround strategy, SKS Microfinance had four consecutive quarters
of profit -- a profit after tax (PAT) of Rs 1.2 crore in Q3-FY13, Rs 2.7 crore in Q4-FY13, Rs 5
crore in Q1-FY14 and Rs 16.3 crore in Q2-FY14
The lending portfolio grew sequentially by 11 per cent to Rs 1,320 crore from the non-
AP regions in the fourth quarter of 2011-12, with 95 per cent collections on an average.
The collection efficiency in 16 non-AP states has further improved to 99.9% and cost of
borrowing has come down
23. 2010 Crisis & Turnaround Strategy
Turnaround Strategy
Building blocks of SKS’s turnaround strategy were -
• Fully providing for the Andhra Pradesh exposure,
• Managing the supply side shock,
• Optimizing the cost structure,
• Insulating the non-Andhra Pradesh portfolio from contagion,
• Recapitalization and return to profitability.
Key focus areas were - Consolidation of its customer base, cross-selling initiatives and
diversification and increased collection efficiency
Limiting Exposure to any single state to 15% of the total portfolio outstanding and to
50% of the reported net worth - The exposure to AP reduced to Rs 236 crore or 15 per
cent of the loan portfolio as of March 2012.
Structural Readjustment—branch and headcount rationalization—Reducing number of
branches and employee headcount
De-risking strategy along with the geographical de-risking - SKS diversified its lending to
include financing of small kiranas, loans for purchase of mobile handsets and gold loans
and came with insurance products as de-risk products
SKS opted not to go in for the corporate debt restructuring package, and repaid its Rs
3,800 crore debt without delay and raised Rs 230 crore from institutional investors in
QIP
28. Performance: post-IPO period
24%
16%
6% 11%
38%
5%
Market Share
SKS MicroFin
Spandana
Share Microfin
Asmitha
Microfin
Kshetra
Dharmasthala
Other
Source: Moneycontrol
In FY13, Company was among the
top three MFIs in terms of client
outreach, total value of loans
disbursed, Gross Loan Portfolio
outstanding and number of
branches.
2012-Debacle
(Source: MFIN Micrometer, as on March 31, 2013)
29. SKS Microfinance: New Initiatives
SKS currently reaches over 1 lakh villages in India with a presence in 15 states through
its 1256 branches, to provide more financial services to the bottom of the pyramid by
leveraging its extensive branch network and financing ability
Solar Lamps Financing Program
Indian homes traditionally use kerosene lamps to light up their homes
Prolonged exposure to fumes and harmful particles dangerous to health
SKS partnered with d.light solar to make solar lamps available to its members
Pilot initiative in 10 branches across 2 states, estimated to reach 475 branches in FY15
Mobile Financing Program
High potential in mobile telephony, but high costs deterrent to rural borrowers of SKS
SKS partnered with Nokia India Pvt Ltd. to supply handsets to its borrowers
Loan product has been designed to facilitate the process of disbursement of mobile handsets
Under this program, SKS has disbursed 3.5 lakh mobile loans to its borrowers in 6 states in India
Gold Loan
Gold Loan pilot launched under the name of “Swarnapushpam”
Provide personal/business loans to our members for meeting their short-term liquidity requirements
Loans secured by gold jewellery ranging from Rs.2000 to Rs.1,00,000
Pilot extended to 40 branches across states of Karnataka, Maharashtra and UP
Gold Loan portfolio stood at Rs 55.9 crore, representing 2.4% of total outstanding loan portfolio at the end
of FY13
30. SKS Microfinance: Latest Developments
SKS announced a reduction of interest rate charged from borrowers by 100
basis points from 24.55% to 23.55% with effect from 1 October
Rs.400 crore capital raised in May through a qualified institutional placement
(QIP) route