SBI Cards IPO: SBI Cards and Payment Service’s initial public offering (IPO) will hit the capital market during the first week of March. The company is the second-largest credit card issuer in India with nearly 18 percent market share. The company plans to issue new shares worth ₹500 crores and will offer up to 130.5 million shares for sale, the prospectus, dated February 18, showed. The bidding process will close on March 5.

Highlights 

  • SBI Cards plans to issue new shares worth ₹500 crores and will offer up to 130.5 million shares for sale
  • SBI Cards IPO will open for subscription on March 2
  • SBI Cards is the second-largest credit card issuer in India with an 18% market share

The price range has been fixed at ₹750-755 per share, the Wall Street Journal reported, citing the term sheet. India’s biggest brokerage Zerodha also mentioned this price range on its website. The lot size of SBI Cards IPO, or the minimum number of shares to be subscribed, has been fixed at 19 shares, says Zerodha.

Below are key things that you need to know about SBI Cards IPO:

When will SBI Cards IPO open?
The IPO will open for subscription from March 2-5. The shares will be credited to investors’ Demat account on or around March 13.

What is the SBI Cards shares listing date?
Shares of the company will be listed on BSE and NSE both on or around March 16, according to the red herring prospectus.

Who are the lead managers of SBI Cards?
Kotak Mahindra Capital, Axis Capital, BofA Securities, HSBC, Nomura, SBI Capital Markets are the book running lead managers to the issue.

What is the issue size of SBI Cards IPO?
The company plans to issue new shares worth Rs 500 crore and will offer up to 13.05 crore shares as an offer for sale, according to the prospectus.

What is the price band?

SBI said the price band of the upcoming IPO of SBI Cards and Payment Services has been fixed in the price range of Rs 750-755 per share. At the higher end of the price band, the SBI Cards IPO is expected to raise around Rs 9,000 crore, making it the fifth-largest IPO so far.

What are SBI Card’s strengths?

    • Second largest credit card issuer in India with deep industry expertise and a demonstrated track record of growth and profitability
    • Diversified customer acquisition capabilities
    • Support of a strong brand and pre-eminent promoter
    • The diversified portfolio of credit card offerings
    • Advanced risk management and data analytics capabilities
    • Modern and scalable technology infrastructure   

Overview of the credit card industry

The credit card industry intends to grow 2.5 times in the next five years. Credit card spends have registered a robust growth, growing at a CAGR of 32 percent from fiscal 2015 to fiscal 2019 to reach Rs 6 lakh crore as of fiscal 2019, and is expected to grow at a healthy rate to reach Rs 15 lakh crore as of fiscal 2024, which is 2.5 times over fiscal 2019, according to CRISIL Research.

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