Shares of SKS Microfinance rose over 7 per cent in trade on Friday after the microfinance company reduced interest rate chanrged to borrowers from 20.75% to 19.75% with effect from December 7, becoming the first MFI to charge sub-20% interest rate.
The stock ended the day 7.23 per cent up after hitting an intraday high of 456.10, up 7.57 per cent on the Bombay Stock Exchange (BSE), but was still trading 30.85 per cent below its 52-week high that it touched on July 07, 2015.
"SKS Microfinance Limited could reduce its marginal cost of borrowing to 11.3% in Q2-FY16 from 13.6% in FY14 on account of downward adjustments in risk premium," the company said in a filing to BSE.
"Marginal cost of borrowing for H2-FY16 is expected to be lower than 11.3% given the Company has accessed refinance from MUDRA at 10% and issued commercial papers at 9.5% per annum in October and November 2015," it added.
The Company has a short-term credit rating of 'A1+' and a long-term rating of 'A+'.
As of September 30, 2015, SKS Microfinance Limited had a net worth of Rs 1,203 crore and a capital adequacy of 24.6%. Cash and cash equivalents stood at Rs 834 crore.
In a separate filing, SKS Microfinance said it has partnered with IBM to transform operations from paper-based processes to a mobile solution.
The end-to-end mobile solution will eliminate time-consuming and paper-based processes, and speed up the acquisition of new customers, the company said in a regulatory filing.