The credit card division of the State Bank of India, SBI Cards and Payment Services, is slated to proceed with its initial public offering (IPO) on March 2, 2020, and plans to close on March 5, 2020. The IPO is targetting a value of Rs. 9,000 crore.
SBI Cards is currently the second-largest player in the credit card market in India today. According to CNBC-TV18, the credit card arm of the State Bank of India holds 18 percent of the market share. Meanwhile, the state bank itself is responsible for the 76 percent of shares in SBI Cards, while the remaining stakes fall under the Carlyle Group.
The IPO will bring fresh shares worth Rs. 500 crore and a sale offer of up to 130,526,798 equity shares. The equity shares for sale will be split by 37,293,371 for SBI and 93,233,427 for Carlyle Group.
In a statement to CNBC-TV18, sources familiar with the matter shared that prices per share will be priced ranging from Rs. 745 to 775.
Abhishek Chaturvedi from Ultimate Wealthowl, a company that deals with unlisted stakes on the market, says that they “expect a price band of Rs. 690 – 710 and the stock is trading at a premium of Rs. 270 – 280.”
Chaturvedi also said, “Once the actual price band is out, the premium is likely to rise. It may cross 50 percent if the price band is on the expected lines. However, if the price band comes close to Rs. 1,000, the premium will remain in the current range,” reports the Economic Times.
The SBI Cards IPO is reportedly a chance for current investors to further enrich their shares in the company, while also serving as a venue for outsiders to invest in the booming and modernizing landscape of India, notes CNBC-TV18.
Chaturvedi states the equity shares are worth buying as the “IPO will unlock its true value,” reports the Economic Times.