SKS Microfinance IPO Basis of Allotment

SKS MICROFINANCE LIMITED

(The Company was incorporated as SKS Microfinance Private Limited on September 22, 2003 under the Companies Act, 1956. Pursuant to a resolution of the shareholders passed on May 2,2009, the Company was converted into a public limited company and the word 'private' was deleted from its name on May 20, 2009.
Registered and Corporate Office: Ashoka Raghupathi Chambers, D No. 1-10-60 to 62, Opposite to Shoppers stop,  Begumpet, Hyderabad 500 016 Tel: (91 40) 4452 6000; Fax: (91 40) 4452 6001 Contact Person: Mr. S.K. Bansal, Company Secretary and Compliance Officer
Website: www.sksindia.com Email: skscomplianceofficer@sksindia.com

BASIS OF ALLOTMENT

PUBLIC ISSUE OF 16,791,579 EQUITY SHARES OF RS. 10 EACH FOR CASH AT A PRICE OF RS. 985 PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF RS. 975 PER EQUITY SHARE) FOR QUALIFIED INSTITUTIONAL BIDDERS AND NON-INSTITUTIONAL BIDDERS AND RS. 935 FOR RETAIL INDIVIDUAL BIDDERS (INCLUDING A SHARE PREMIUM OF RS. 925 PER EQUITY SHARE) AGGREGATING UP TO RS. 16,287.83 MILLION (THE 'ISSUE') CONSISTING OF A FRESH ISSUE OF 7,445,323 EQUITY SHARES ('FRESH ISSUE') BY SKS MICROFINANCE LIMITED ('SKS' OR THE 'COMPANY' OR THE 'ISSUER') AND AN OFFER FOR SALE OF 9,346,256 EQUITY SHARES ('OFFER FOR SALE') BY SEQUOIA CAPITAL INDIA II LLC, SKS MUTUAL BENEFIT TRUST - NARAYANKHED, SKS MUTUAL BENEFIT TRUST - JOGIPET, SKS MUTUAL BENEFIT TRUST - MEDAK, SKS MUTUAL BENEFIT TRUST - SADASIVAPET, SKS MUTUAL BENEFIT TRUST - SANGAREDDY, KISMET MICROFINANCE AND MAURITIUS UNITUS CORPORATION (THE 'SELLING SHAREHOLDERS'). THE FRESH ISSUE AND THE OFFER FOR SALE ARE JOINTLY REFERRED TO HEREIN AS THE 'ISSUE'. THE ISSUE WILL CONSTITUTE 21.6% OFTHE FULLY DILUTED POST ISSUE PAID-UP CAPITAL OF THE COMPANY*.
# A discount of Rs.50 to the Issue Price determined pursuant to completion of the Book Buildng Process has been offered to Retail Individual Bidders (the 'Retail Discount').
## The Company has allotted 43,39,111 Equity Shares to Anchor Investors at Rs. 985/- per Equity Shares in accordance with the SEBI regulations.

THE FACE VALUE OF THE EQUITY SHARE IS RS. 10 EACH AND THE ISSUE PRICE IS 98.5 TIMES FOR QUALIFIED INSTITUTIONAL BIDDERS AND NON-INSTITUTIONAL BIDDERS AND 93.5 FOR RETAIL INDIVIDUAL BIDDERS.

In terms of Rule 19(2)(b) of the Securities Contracts (Regulation) Rules, 1957 ('SCRR'), this being an issue for less than 25% of the post-Issue capital of the Company, the Issue is being made through the 100% Book Building Process wherein at least 60% of the Issue shall be allocated on a proportionate basis to Qualified Institutional Buyers (QIB). 5% of the QIB Portion (excluding the Anchor Investor Portion) shall be available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the QIB Portion shall be available for allocation on a proportionate basis to all QIB Bidders, including Mutual Funds, subject to valid Bids being received at or above the Issue Price. Further, not less than 10% of the Issue shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 30% of the Issue shall be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above the Issue Price. If at least 60% of the Issue cannot be allotted to QIBs, then the entire application money shall be refunded forthwith. Potential investors may participate in this Issue through an Application Supported by Blocked Amount ('ASBA') process providing details about the bank account which will be blocked by the Self Certified Syndicate Banks ('SCSBs') for the same. All investors other than QIBs can participate through the ASBA process. The Issue received 180,570 applications for 192,062,171 equity shares at the Issue Price resulting in 11.44 times subscription. The details of the applications received in the Issue at the Issue Price from Qualified Institutional Buyers, Non-Institutional, Retail Individual Bidders and Anchor Investor categories are as under: (Before technical rejections)

Final Demand
A summary of the final demand as per the BSE and the NSE as on the Bid/ Issue Closing Date at different bids is as detailed hereunder:

The Basis of Allocation was finalized in consultation with the Designated Stock Exchange, being the Bombay Stock Exchange Limited ('BSE') on August 11, 2010.

A. Allocation to Retail Individual Bidders (Including Applications Supported by Blocked Amount ('ASBA')) (After Technical Rejections)

The Basis of Allocation to the Retail Individual Bidders, who have bid at cut-off or at the Issue Price of Rs.985/- per Equity Share, was finalized in consultation with BSE (Rs.50 discount on the issue price was given to the retail individual investors and hence the offer price for this category is Rs.935/- per equity share). This category has been subscribed to the extent of 2.72 times. There were 25973 applications for 80122931 equity shares made under ASBA process. Of these 25170 applications for 74021584 equity shares were found valid and on proportionate basis the Company has allotted to 22854 investors aggregating to 4383319 shares. The total number of shares allotted in Retail Individual Investor category is 5,037,474 Equity Shares which were allotted to 165370 successful applicants. The category-wise details of the Basis of Allocation are as under:

B. Allocation to Non Institutional Investors (After Technical Rejections)
The Basis of Allocation to the Non-Institutional Bidders, who have bid at the Issue Price of Rs.985/- per Equity Share or above, was finalized in consultation with BSE. This category has been subscribed to the extent of 17.69 times. Overall 484 applications for 1679157 equity shares were found valid and they were considered for allotment. The category-wise details of the Basis of Allocation are as under:

C. Allocation to QIBs
The Basis of Allocation to the Qualified Institutional Bidders, who have bid at the Issue price of Rs.985/- per Equity Share was finalized on the price priority basis. Overall 166 applications for 137576985 Equity Shares were found valid and the quantum of shares allotted to this category is 7052464. The summary of allotment is as under:

D. Anchor Investors

The Company allotted 3022484 equity shares to 36 Anchor Investors in consultation with the Lead Managers at a price of Rs. 985/- per Equity Share. The IPO Committee of the Board of Directors of the Company at its Meeting held at Hyderabad on 12th August, 2010 has approved the basis of allocation of Equity Shares of the Issue and has accordingly allotted the Equity Shares to the Bidders.

The CAN-cum-Refund Orders and allotment advice and/ or notices have been dispatched to the address of the Bidders as registered with the depositories on or prior to 13th August, 2010. Further, the instructions to Self Certified Syndicate Banks have been dispatched on or prior to 13th August, 2010. In case the same is not received within 10 days, investors may contact at the address given below. The Refund Orders have been over-printed with the Bank Account details as registered, if any, with the depositories. The Equity Shares allotted to successful applicants are being credited to their beneficiary accounts subject to validation of the account details with the depositories concerned.

The Company is taking steps to get the Equity Shares admitted for trading on the Bombay Stock Exchange Limited and National Stock Exchange of India Limited by 16th August, 2010.

INVESTORS PLEASE NOTE
This details of the allocation made has been hosted on the website of Registrar to the Issue, Karvy Computershare Private Limited at http://karisma.karvy.com

All future correspondence in this regard may kindly be addressed to the Registrar to the Issue quoting full name of the First/ Sole applicant, serial number of the Bid-cum-Application Form, number of Equity Shares bid for, name of the Member of the Syndicate, place where the bid was submitted andpayment details at the address given below:

Karvy Computershare Private Limited
Unit: SKS Microfinance Limited
plot No. 17 to 24, Vithalrao Nagar, Hitech City Road, Madhapur
Hyderabad - 500 081, Fax: 040-23420814
Email: einward.ris@Karvy.com

TOLL FREE - HELPLINE NUMBER 1-800-3454001

THE LEVEL OF SUBSCRIPTION SHOULD NOT BE TAKEN TO BE INDICATIVE OF EITHER THE
MARKET PRICE OF THE EQUITY SHARES ON LISTING OR THE BUSINESS PROSPECTS OF SKS MICROFINANCE LIMITED.
Note: All capitalized terms used and not defined herein shall have the respective meanings assigned to them in the Prospectus.