- The SBI Cards initial public offering (IPO) was subscribed 15.5 times on the last day of bids for these shares, on strong demand from institutional investors.
The initial public offering (IPO) of the SBI Cards was subscribed 15.5 times on the last day of bids for these shares, on strong demand from institutional investors led by foreign investors and domestic investors, such as banks and insurance companies. With the portion of shares reserved for them subscribed 57 times, institutional investors came full force.
The IPO earned offers for 1,55,35,33,765 shares, compared to 10,02,79,411 shares issued. A record 57.18 times has been subscribed to the Quota of eligible institutional investors (QIB). Non-institutional investors (NII) quota was bid 2.18 times, retail 1.77 times, employee 3.29 times and SBI shareholder quota 3.29 times.
Bankers expect the issue to be subscribed 30 to 35 times as high net worth individuals (HNIs) are expected to position the majority of their bids on the last day, reserved exclusively for them and retail investors on Thursday
“All portions have been subscribed but we expect this subscription ratio to go further tomorrow as HNIs usually wait until the last day to put their bids because they’re playing on leveraged capital and like saving interest costs. Looking at institutional investor demand, we expect many HNIs to bid aggressively tomorrow and higher the overall subscription, “an individual involved in the issue said.
With this category of investors bidding for 138.52 crore shares out of the 2,44 crore shares on offer for this category of investors, demand from institutional investors was the highest on Wednesday. Led by banks and insurance companies both FIIs and domestic institutional investors bid aggressively.
Non-institutional investor demand, including retail investors, high net worth individuals, companies, employees and shareholders, was comparatively weaker with total offers for 4.01 crore shares out of the 1,83 crore shares on offer, although all portions of the issue were fully subscribed.
“Filling up the retail portion is always a challenge and we had Rs 3,000-crore shares reserved for this segment this time around. We are pleasantly surprised to get a two-time subscription to this section. The part of the employee and the one reserved for the shareholders had also been subscribed 3.3 times and 3.5 times, respectively, “another person involved with the issue said.
The final day of the issue, however, was held especially for retail and HNI investors. The price band for each share range is Rs 750 to Rs 755. SBINSE 0.40 percent Cards have held 18.64 lakh shares apart for employees and are giving this class a Rs 75 per share discount.
SBI Cards expect to raise about Rs 10,350 crore through the IPO that is India’s fourth-largest. The majority of the proceeds will go to two shareholders State Bank of India (SBI) and Carlyle, with the company holding just Rs 500 crore. SBI Cards had raised Rs 2,800 crore from 74 anchor investors over the weekend which includes GIC of Singapore, the sovereign fund from Kuwait and large foreign institutional investors and private equity funds.
