SKS Microfinance credit rating for bank borrowings has been upgraded by rating agency to Al+ from Al for short-term facilities and to A+ from A for long-term facilities for an aggregate sum of Rs 20 billion. The company's borrowings were at Rs 14.56 billion as of May 31, 2014.

The company expects the upgrade to have a positive impact in terms of reduction in the cost of borrowing, but is unable to quantify the same at this point in time.

According to the rating agency, short-term debt instruments with Al + rating are considered to have ''a very strong degree of safety" regarding timely payment of financial obligations. Such instruments carry the lowest credit risk.

Shares of the company gained Rs 7.25, or 2.74%, to settle at Rs 272.05. The total volume of shares traded was 165,051 at the BSE (Tuesday).