New Delhi: SBI Cards and Payment Services has raised Rs 2,769 crore from 74 anchor
investors, ahead of its initial share sale starting on March 2.
Anchor investors are institutional investors who are offered shares in an initial public offering (
IPO) ahead of its opening.
Singapore government, Monetary Authority of Singapore, HDFC Mutual Fund, Government Pension Fund Global and Birla Mutual Fund, are among the anchor investors.
Shares have been allotted at the offer's upper price band of Rs 755 apiece, as per a regulatory filing.
There are 12
mutual funds among the 74 anchor investors, who have been allocated 3,66,69,589 shares and its value stood at Rs 2,768.55 crore.
The price band for the share sale -- which would be open from March 2 to 5 -- has been fixed at Rs 750-755 apiece.
SBI Cards expects to raise around Rs 9,000 crore through the IPO.
SBI Card IPO: Why is it being seen as a hot cake?
New kid in town
26 Feb, 2020
SBI Cards and Payment Services, a subsidiary of the State Bank of India (SBI), will hit the primary market with a Rs 10,350 crore initial public offering on March 2. The IPO will be the fifth biggest in India so far. With investor interest already high in the IPO, we bring you all the details you need to know before hitting 'subscribe' on the issue:(With inputs from Yes Securities and Axis Capital)
Who is SBI Card anyway?
26 Feb, 2020
SBI Cards is the second-largest credit card issuer in India, having a market share of 18.1% in terms of the number of credit cards outstanding as of November 30, 2019. The firm was incorporated on May 15, 1998. It is engaged in the business of issuing credit cards to consumers in India. It is incorporated as a joint venture between State Bank of India and GE Capital Mauritius Overseas Investment.
Is it a good profit-making venture?
26 Feb, 2020
The company has a diversified revenue model whereby it generates both non-interest income as well as interest income on its credit card receivables. The share of revenue from operations that the company derives from non-interest income has steadily increased over the past three fiscal years, from 43.6 per cent in FY17 to 48.9 per cent in FY19, YES Securities said in a report. The company’s total income increased from Rs 34,71 crore in FY17 to Rs 7,286.80 crore in FY19 at a CAGR of 44.9 per cent and its revenues from operations increased from Rs 3,346.20 crore in FY17 to Rs 6,999.10 crore in FY19 at a CAGR of 44.6 per cent. Net profit increased from Rs 372.90 crore in FY17 to Rs 862.7 crore in FY19 at a CAGR of 52.1 per cent. According to a Crisil report, the company is a leading player in open market customer acquisition in India. It had a presence in 3,190 open market points of sale across the country as of 9M FY20.
SWOT Analysis: Key Strengths
26 Feb, 2020
>> 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.
>> Diversified portfolio of credit card offerings.
>> Advanced risk management and data analytics capabilities.
>> Modern and scalable technology infrastructure.
>> Highly experienced and professional management team.
Key Risks: Loss of promoter support
26 Feb, 2020
The company derives substantial benefits from its existing relationship with its promoter, and a loss or reduction in the level of support it receives from its promoter could adversely affect the company. In FY19, new accounts acquired from its promoter’s customer base accounted for 55.2% of the company’s total new accounts. The promoter has extended working capital loans and non-convertible debentures to the company.
As per draft paper for the IPO, SBI Cards would offer up to 130,526,798
equity shares through an offer-for-sale route. This would include offloading of up to 37,293,371 shares by SBI and 93,233,427 scrips by Carlyle Group.
In addition, the company would issue fresh equity shares worth Rs 500 crore.
SBI holds 76 per cent in SBI Cards and the rest of the stake is held by Carlyle Group.