Viswanathan K's Thoughts

IPO’s are big news these days. The Nykaa IPO just made Falguni Nayar India’s richest self-made woman billionaire, at $6-7 billion. Even a loss-making delivery app like Zomato listed on the stock exchange at a price that made it more valuable than the entire hospitality sector ! The Policy Bazaar and PayTM IPO’s are other mega-valuations in the pipeline for loss-making companies.   On that point of loss-making companies with huge valuations (Nykaa is an exception on that front), Santosh Desai had written that Zomato made some wonder if the market “had lost all touch with and indeed interest in, reality”. It feels surreal: “ The apparently breezy efforts of some young kids out of college who not only are able to raise funds of a scale that boggle the imagination, lose money extravagantly and still generate staggering valuations, all in the blink of an eye. It does seem unfair.” Or is this a sign that many believe that such companies, while loss making today, will make a lot of m

Microfinance refers to the providing of financial services to low-income clients, especially those who traditionally lack access to banking and related services. This includes not just loans but also savings and insurance. Those who promote microfinance believe that such access helps people out of poverty. The most famous guy from the world of microfinance is Muhammad Yunus , a Bangladeshi banker, economist and Nobel Peace Prize winner. SKS Microfinance is India’s largest and the world’s fastest growing microfinance organization. Operating in 19 states, it provides collateral-free loans to the poor. 85% of its borrowers are poor women. It made loans worth Rs 20,000+ crores last year. It provides loans for cell phones, local retail shops, housing loans (via a tie up with HDFC) and life insurance (via a tie up with Bajaj Allianz). So where does SKS gets the money to lend? From other banks and financial institutions. Also from private equity investors and venture capitalist