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SKS Microfinance to revamp its business model

23 Nov 2011 Evaluate

SKS Microfinance, India’s largest microfinance institution, is gearing up to change its business model. From an MFI, the company might reposition itself as a rural financial services company covering mortgages, insurance, payment channels such as automated teller machines, among other things, in addition to tiny loans.

The company’s board of directors meeting, which is scheduled today, is expected to take up similar issue for consideration amid speculations that its founder and chairman Vikram Akula may step down. The company may also go for many new products, the blueprint for which is expected to be unveiled in the crucial Mumbai board meeting.

Recently, the company has been reported to receive express of interest (EoI) from a couple of existing investors for its proposed Rs 900 share sale to institutional investors. The company, which has started the qualified institutional process (QIP), hopes to have all approvals in place by December first week.

The company aims to raise the money to cash in on the demand-supply gap in non-Andhra Pradesh markets. However, it is exploring opportunities to raise funds not only from existing investors but also from global microfinance investment vehicles, private equity players, socially relevant investors and public market participants.

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