- SBI Cards and Payment Services ‘ initial public offering (IPO) rs 9,500-crore is expected to be priced in the Rs 750-755 band, said, bankers.
SBI Cards and Payment Services ‘ initial public offering (IPO) rs 9,500-crore is expected to be priced in the Rs 750-755 band, said, bankers. The question, which will hit the street on March 2, is expected to be available to subscription for four days, as opposed to the usual three days on high investor appetite expectations.
According to banking sources, the IPO’s fourth day will be held solely for retail investors, high-network investors (HNIs), and SBI shareholders.
Approximately 1.31 Crore shares are reserved for shareholders of State Bank of India. SBI shareholders can apply in both the retail and shareholder categories as of 20 February 2020, the day of filing red herring prospectus, if the application sum falls within the Rs 2 lakh limit.
According to the draft red herring prospectors (DRHP), it will offer up to 13,71 crore equity shares with a face value of Rs 10 via an offer for sale route. This will include up to SBI’s 3.73 crore share sale and Carlyle Group’s (CA Rover) 9.32 crore shares. The company will also issue Rs 500 Crore fresh equity shares. SBI owns 76 percent of SBI Cards and Carlyle Group holds the rest.
In the unofficial grey market, shares in SBI Cards are exchanged at around Rs 1,080 per unit, which is a premium of Rs 330 per unit, or 44 percent over their expected IPO price. SBI Cards is priced at approximately Rs c1 lakh crore at the grey market level. The market value of Parent SBI concerns Rs 2.92 lakh crore.
In October 1998 the State Bank of India and GE Capital unveiled SBI Cards. State Bank of India and The Carlyle Group bought a stake in the Company from GE Capital in December 2017. The company offers access to a wide array of value-added payment products and services to Indian customers. SBI Card operates via a footprint of more than 130 cities with a customer base of over 9 million
From a year earlier, SBI Cards posted revenue growth of 36 percent to some 4,363.9 crores for the six months to last September. During the time, its profit jumped 78 percent to 1,034.58 crores.
In the next five years, the credit card industry expects to expand 2.5 fold. According to CRISIL Research, credit card spending has registered a robust growth, rising at a CAGR of 32 percent from fiscal 2015 to fiscal 2019 to reach Rs 6 lakh crore by fiscal 2019, and is expected to grow at a healthy rate to reach Rs 15 lakh crore by fiscal 2024, which is 2.5 times over fiscal 2019.