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Mar 02, 2020 | Blogs | Credit Cards

SBI Cards IPO To Be Opened In March

SBI Cards IPO To Be Opened In March: Sources

State Bank of India (SBI) is currently the largest lender in India. Hence; the moves made by it create ripples in the market. A new such ripple is likely to be created in the market in March. The credit card unit of SBI, SBI Cards and Payment Services will go for the initial public offer (IPO) in the first week of March. 

According to several reports published in the media, the anchor book for IPO will be opened for institutional investors in February end. The permission to go IPO was given to SBI Cards and Payment Services just last week by the Securities and Exchange Board of India (SEBI). The date is not announced officially either by SEBI or the SBI. 

Right now, the State Bank of India Cards and Payment Services is supported by SBI and a private equity company called Carlyle Group. Once the IPO is done, the SBI and Carlyle Group will release their shares to a large extent. 

Talking about equity sharing, the State Bank of India owns more than one third in the SBI Cards and Payment Services. While 26 per cent of the shares are owned by CA Rover Holdings, which is a subsidiary company of Carlyle Group. 

According to market pundits, big banking fishes like Axis Capital, SBI Capital Markets, Kotak Mahindra Capital Company, DSP Merrill Lynch,  HSBC Securities and Capital Markets, and Nomura Financial Advisory and Securities will be leading the table in the auctioning process. 

The total market value of the SBI Cards and Payment Services is around Rs 60,000 crore. Out of the total Rs 60,000 crore, around Rs 9,600 crore is expected to be raised in the IPO. 

An ordinary individual who is holding shares in SBI can invest up to Rs 2 lakh in the IPO, while those shareholders who employees in the bank can apply for investment under the employee category and invest up to Rs 5 lakh. 

If you are in a mood to invest in the IPO, here are some quick stats:

●    SBI cards is second in the cards market with a market share of 18 per cent.
●    To give the exact numbers, SBI cards has sold more than 9.4 million cards.
●    It is expecting to raise profit at a rate of 25 per cent per year. 

In the times where NPAs (Non-performing assets) of banks are increasing, SBI Cards and Payment Services got AAA and A1+ ratings by CRISIL and ICRA. Both are independent credit agencies with good credit history in the market. With such high ratings by independent credit agencies, SBI Cards and Payment Services is expecting that the IPO can raise money not just by the institutional investors, but also by the general public, individual investors.

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