Bangalore: 'Paradise Lost' is something that can define SKS Microfinance's plight at present. The NBFC firm with a market cap of Rs 10,000 crore which is India's largest microfinance organization and one of world's fastest growing firms till recent times has been bombed at its very own subsistence by the negative publicity over its sacked CEO and farmer suicides in AP. Founded by former McKinsey & Co consultant Vikram Akula, SKS' evolution from the nonprofit SKS Society to the ultimate NBFC, SKS Microfinance is much of a fairy tale. It was funded by individual and institutional donations and focused on markets within its home state of Andhra Pradesh and decided to pursue an aggressive growth plan in 2005 and transformed into a Non-Banking Financial Company (NBFC) regulated by the Reserve Bank of India (RBI). Everything operated slickly with the firm counting on U.S. billionaire George Soros, venture capitalist Vinod Khosla and Infosys founder NR Narayana Murthy among its investors. But the success story started smelling an anti-climax when Suresh Gurumani, Chief executive was terminated in a power struggle followed by a fall in share by 9 percent in intra-day trading. Though the company cleared doubts on the succession and power issues in the following days, the situation was further exacerbated on account of heightened regulatory scrutiny into the operations of microfinance institutions due to high interest rates and coercive loan recovery methods. Farmer suicides in Andhra Pradesh also added fuel to the fire. On the sensitive atmosphere of National Stock Exchange nothing could work more than negative publicity and to the woes of SKS; shares started bleeding and currently strike an ever low of 894.70, way below their IPO issue price of Rs 985 apiece. Running through the current state of affairs SKS is not the only firm to be facing the dead end. Microfinance as a whole is messed up with flak running over microfinance policy in India. Government's regulation on microfinance policy is the immediate thing to look forward to. Taking a fresh stock of the situation, brokers and share market experts are cautioning their clients against buying the shares of this careworn company until the government clarifies its stance on microfinance regulations. But as the current states of the situation are clearly going against the company, majority of its shareholders are on a selling spree and this is what has aggravated the situation further. Meanwhile, Catamaran Venture Fund, set up by Infosys Chairman N.R. Narayana Murthy, will stay invested in the troubled SKS Microfinance due to the statutory lock-in period till January 2012. "The basic business model itself is under pressure. There will be curbs on lending limits and interest rates (charged on borrowers) once a new regulator is appointed. Microfinance companies won't be able to use aggressive means (like coercion) to collect money from borrowers. All these factors will impact earnings," Sanjeev Patni, Head-institutional equities, Centrum Broking was quoted by Economic Times. However, according to a report by topinnews.com, this is not the only issue that is dragging SKS Microfinance down; non-performing loans, regulatory interference and controls over lending are some other factors that are all making it all the more difficult for the company to survive and ride past this difficult situation. The company which had a substantially huge market cap until September 20, when the stock hit its peak at Rs 1,491, has now hit its nadir at Rs 7,237 crore and the combined loss to investors stood at about Rs 2,856 crore. With so much in store and things slightly out of balance, the question is - Will the paradise be regained?