CreditAccess prepares to launch QIP
Shares of CreditAccess Grameen rebounded from a year low today as the micro lenders fund raising plan triggered value buying. The embattled sector is looking to protect crucial parameters to stay relevant and build war chest for the possible revival in prospect, post Covid-19 scenarios.
CreditAccess Grameen plans to raise up to Rs 1,000 crore this month by selling shares to financial institutions. Investment bank ICICI Securities is advising CreditAccess Grameen on the QIP.
Last month, the micro lender received shareholder approval for the proposal to to raise up to Rs 1,000 crore in fresh funds via issue of shares. The qualified institutional placement (QIP) is likely to be launched as early as this week.
It requires additional funds to augment its long-term resources for meeting funding requirements for its business activities and general corporate purposes according to its growth strategy and to improve the capital adequacy ratio as laid down by the Reserve Bank of India.
The micro lender has seen steady improvement in collections since the country began easing lockdown restrictions.
From June to September, its collections have improved from 74% to 88%, the lender said in a recent investor presentation. As of September, around 77% of its customers were making 100% payments, while only 8% of the customers made no payments.
At the end of June quarter, CreditAccess Grameen’s gross loan portfolio stood at Rs 11,724 crore, with 4 million active borrowers and a branch network of 1,388 locations.
The Bengaluru headquartered largest microfinance institutions is focused on providing micro-loans to women predominantly in rural areas across India. It operates in 13 states, including Karnataka, Maharashtra, Tamil Nadu, Chhattisgarh and Madhya Pradesh.
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