SBI Card’s Rs 9,000 crore IPO opens on March 2

New Delhi, Feb 20 (IANS): SBI Cards, the cards and payment services from the State Bank of India, will launch its initial public offering on March 2 to raise about Rs 9,000 crore. The proceeds are to be used by the parent SBI to enhance credit growth. Analysts have pegged SBI Cards IPO price in the range of Rs 750-775 per share. The SBI Cards IPO comprises a fresh equity issue worth Rs 500 crore and an offer for sale of up to 130,526,798 equity shares. This will include up to 37,293,371 share sale by SBI and up to 93,233,427 shares on offer by Carlyle Group, the company said in its prospectus.

The bidding process will close on March 5. SBI Cards is second-largest credit card issuer in India, with an 18 per cent market share.SBI holds 76 per cent in SBI Cards and rest of the stake is held by Carlyle Group. While Carlyle is looking to sell a 10 per cent stake in the company via IPO, SBI would sell 4 per cent. The Carlyle Group acquired GE Capital’s stake in the Company. The share sale is set to be the largest IPO in the country after Coal India, Reliance Power, GIC Re and Oil and Natural Gas Corp (ONGC). For FY19-20, it is likely to be the largest IPO.

Emkay Securities said that, given the higher share of OFS, it seems that the IPO is primarily meant to unlock value for the existing investors (SBI and Carlyle) and also to provide an opportunity for non-promoters to invest in a direct play on India’s rising consumerism and digitisation story.”For SBI, the IPO would imply a value of Rs 37 per share (post discount), which is higher than Street estimates, adding Rs 15 to the target price for SBI (Rs 350),” it added. Kotak Mahindra Capital, Axis Capital, DSP Merryl Lynch, Nomura Financial Advisory, HSBC Securities and SBI Capital Markets are the book-running lead managers of the issue.

SBI Cards reported revenue growth of 36% to Rs 4,363.9 crore from a year ago. Its profit jumped 78% to Rs 1,034.58 crore during the period. SBI Cards has customer base of over 9 million. Headquartered in New Delhi, as of September 30, 2019, the company has a sales force of 33,086 outsourced sales personnel operating out of 133 Indian cities.



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