NEW DELHI (Reuters) - India’s largest microlender SKS MicrofinanceSKSM.BO fired chief executive Suresh Gurumani 18 months into the job and replaced him with his deputy.
The company, which raised $358 million in an initial public offer in August, said on Monday financial irregularities were not behind Gurumani’s ouster but gave no reason.
The company’s shares fell 9 percent initially before trimming losses to stand down 6 percent.
In a stock exchange filing, SKS named M.R. Rao as the new CEO for three years, effective Monday.
In a conference call with analysts, company officials would not comment beyond the filing.
“But one thing I want to assure you and confirm as the CFO is that it’s not an issue of any financial irregularity as you can see our numbers are in great shape,” Chief Financial Officer Dilli Raj told analysts on the call.
SKS shares, valued at about $2 billion, ended 5.8 percent down on Monday at 1,276.50 rupees after falling as much as 8.9 percent earlier in the day. The BSE Sensex closed 0.2 percent higher.
At Friday’s close, the company’s shares had gained about 38 percent from its IPO issue price of 985 rupees.
Founded by Vikram Akula, a former McKinsey consultant, SKS has nearly 7 million clients and has disbursed close to $3 billion in total.
“This company is not about a particular individual, it’s a team, it’s an institution,” Akula said on the call with analysts, declining to comment beyond the company’s stock exchange filing.
Akula set up SKS as a not-for-profit body in 1998 and converted to a for-profit model five years ago. SKS counts U.S. billionaire George Soros, venture capitalist Vinod Khosla and Infosys founder N.R. Narayana Murthy as its investors.
SKS’s was the most high-profile listing of a microfinance firm globally since the 2007 debut of Mexico’s Compartamos and has drawn keen interest from countries with major microfinance industries, as well as the private equity firms who have recently piled into the sector.
At least half a dozen large Indian MFIs, encouraged by the response to SKS, may be contemplating IPOs, analysts say. These may include Spandana Sphoorthy Financial Ltd, Share Microfin Ltd, Asmitha Microfin and Bhartiya Samruddhi Finance.
Additional reporting by Jigar Pathak in MUMBAI and Anurag Kotoky in NEW DELHI; Editing by David Cowell