SKS Microfinance open to SEBI probe into share fall

The surge in trading volumes and a heavy fall in the shares on a day when the company announced a loss after market hours was being viewed as an unusual event to the market surveillance authorities and accordingly, they have begun a preliminary probe

New Delhi: SKS Microfinance today said it will welcome any enquiry from the Securities and Exchange Board of India (SEBI) to probe the issues leading to a fall in its share price, while asserting that it has not heard anything so far from the regulator or the bourses, reports PTI.

The statement came in the midst of a sustained fall in shares of the country’s only listed microfinance company for the second straight day.

A 20% fall in SKS Microfinance’s share price on Friday, hours ahead of the company's fourth quarter results and after reports of its target share price being cut by more than half in an equity research report, is said to have come under the market regulatory authorities' surveillance lens.

The shares fell further today and were trading 16.99% down at Rs275 at 1330 hours, after hitting its 52-week low of Rs 272.50 apiece on the Bombay Stock Exchange.

Commenting on reports of a possible SEBI probe into the sharp fall in SKS Microfinance stock, a company spokesperson said in a statement: “The company wishes to reiterate that it has not heard anything from either SEBI or the exchanges in this matter.”

The company, however, added that “an analyst report was released and flashed by the media prior to the board meeting to announce earnings on 6th May (where the company was unable to respond due to the earning announcement).”

Asserting that it has not heard anything so far from SEBI or the stock exchanges about any probe, the company said: “SKS Microfinance would welcome any enquiry by the regulator to investigate the circumstances leading to the fall in the share price.”

The 20% fall on Friday was coupled with about a 10-fold surge in the stock’s trading volumes, prompting the bourses and market regulator SEBI to consider a probe.

Sources had said the surge in trading volumes and a heavy fall in the shares on a day when the company announced a loss after market hours was being viewed as an unusual event to the market surveillance authorities and accordingly, they have begun a preliminary probe.

The matter is being probed for a possible breach of insider trading rules or hammering by a bear cartel, sources added.

The fall coincided with a strong upward trend in the market, when the BSE Sensex rose by over 300 points, and happened a couple of days after the RBI said that bank loans to microfinance lenders would be categorised as priority sector lending.

The stock witnessed heavy trading volumes today as well, with a total traded quantity of more than three times what was seen on Friday by early afternoon at the two exchanges.

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