The initial public offer (IPO) of SBI Cards and Payment Services Ltd. (SBI Card) will open on March 2 with the shares priced in a band of ₹750 to ₹755, pegging the overall offer size at more than ₹10,000 crore.
At the upper end of the price band, the company would be valued at about ₹71,000 crore post listing. This would be the first pure-play card company to list on the bourses.
The issue will see existing shareholders State Bank of India (SBI) and private equity major Carlyle diluting their stakes in the company. SBI, which has a stake of 74% in the card company, would be offloading 4% stake by way of the offer while private equity major Carlyle will be diluting its stake by 10% (it currently holds 26% stake). SBI Cards is the second-largest credit card issuer in the country with a market share of 18% on the back of almost 10 million cards.
“We are the second-largest credit card issuer in India both in terms of numbers of credit cards outstanding and amounts of credit card spends, with 9.83 million credit cards outstanding as of November 30, 2019 and ₹1,032.65 billion in total of credit card spends in fiscal 2019,” stated the draft prospectus of the offering.
Further, as per a company presentation, its number of cards has grown three times over the last five years while the spend has registered a six-fold rise in the period. Further, SBI Cards is the largest co-branded card issuer having tie-ups with 12 retail and nine banking co-brand partners.
The issue will close for subscription on March 5 – the last day will be reserved for bids from retail and high net worth individuals.
