Positive on SKS Microfinance: Prashasta Seth

Prashasta Seth, Senior Fund Manager IIFL Wealth, India Infoline, in a chat with ET Now talks about SKS Microfinance.

What is your call really at this point in time for the Microfinance company that we have already seen a bit of a strong rebound coming on SKS Microfinance but in general given the kind of pipeline there is, is there appetite still for this business model?
Till there is a clarity on the ordinance you would not see the appetite of Microfinance company. Having said that you would probably see the clarity coming in sooner rather than later and obviously you would probably get the kind of valuation that you were getting earlier but if you bring paper at a reasonable price people will look at it but obviously that will have to wait till the clarity comes in with respect to the ordinance and how the industry is probably going to evolve in terms of profits and things like that over the next few quarters. People need to get some sense of what would be the sustainable profits post the ordinance and that would probably reflect in what kind of valuations they will give to the company. So my sense is yes it’s a good business model. It’s a business model that is going to stay probably the profitability would not be as high as it was there initially but that was likely to be the case since all these things come into the open. So my sense is paper adequately priced will get the buyers.