In the largest microfinance deal in the world, Hyderabad based SKS Microfinance has raised Rs 366 crore or $75 million from private equity investors. This is fourth round of fund raising by SKS. Sandstone Capital, an India focused hedge fund with $1 billion capital under management, has led the deal, while the other investors in this round include SVB India Capital and Kismet Capital.
SKS has raised funds from Sequoia Capital, Vinod Khosla, Odyssey Capital, Silicon Valley Bank and others. Talking about the exit route to the investors, Akula said its likely to be through an IPO. But they have other options like mergers and acquisitions on the table. Also the investors are likely to get a return of 20%, CEO SKS Microfinance Vikram Akula said.
SKS Microfinance was started in 1998 and now has more than 3.3 million clients across the country. It plans to reach 8 million clients till March 2011. SKS Microfinance claims it has the lowest interest rates offered by MFIs across the country, which range between 25-30%. SKS added 400,000 new clients last month and and is now looking to further expand. The total equity capital of the comapny is now $135 million, and with this investment capital adequacy ratio has gone up from 17% to 30%.
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