SBI market cap crosses Rs 1 trillion mark, stocks give 120% returns in 9 months

Shares of SBI Cards and Payment Services, a subsidiary of State Bank of India, surged over 5 per cent to hit fresh 52-week high of Rs 1,076.95 on Bombay Stock Exchange in intraday trade on Thursday. On the back of rise in share price, the market capitalisation of the credit card company briefly surpassed Rs 1 lakh crore for the first time on Thursday. The market capitalisation (m-cap) of SBI Cards surged to Rs 1.01 lakh crore, nearly 27 per cent of the market value of SBI, which stood at Rs 3.7 lakh crore.

On Friday, the market-capitalisation (m-cap) of SBI Cards and Payment Services surpassed the Rs 1 trillion (Rs 1 lakh crore) mark for the first time ever after shares of the company rose to a new high of Rs 1,095. According to BSE’s data, the SBI arm for credit cards stood at 34th position in the overall m-cap ranking on Friday, moving above Tata Motors, Shree Cement, and JSW Steel.

Most of the analysts have been bullish on the credit card business of SBI Card, citing strong revenue growth led by rising and underpenetrated pay card business. The only listed credit card company in India had posted revenue of Rs 2,540 crore during October-December 2020, against Rs 2,563 crore in the year-ago period. Net profit, however, fell by 52 per cent to Rs 210 crore as compared to net profit of Rs 435 crore in the same period last year.

SBI Cards was established as a joint venture between SBI and GE Capital some 23 years ago. Three years ago, SBI and private equity player Carlyle Group had acquired the GE’s stake. Currently, the shareholding is 74 per cent and 26 per cent, respectively, between the two institutions.