SBI Card IPO: Making a strong IPO (Initial Public Offering), the SBI Card was the biggest IPO in more than year in India with subscription going 22 times the original shares. However, making a debut, the SBI Card made a weak exchange on NSE at discount of almost 13% and was trading at Rs. 568 compared to its issue price of Rs. 755.
SBI Card IPO was for Rs. 10,000 crore along with Payments Services Limited and was closed on the 5th March 2020. The QIB (Qualified institutional buyer) category was subscribe 57.18 times, and the Retail was subscribed by more than 2X.
Today, the Sensex fell by almost 2,000 points, following the suit of weak global markets amid the novel Coronavirus.
SBI Cards, the credit card arm of India’s biggest lender, SBI (State Bank of India), saw a bid of 225 crore shares when the company only offered 10 crore shares. The listing of SBI Cards, the first by a credit card issuer in India and the fifth largest by any company in the country came in at a time when the Global Financial Markets took a nosedive fowling the COVID-19 scare that is said to have originated in China and was declared a Pandemic by the World Health Organisation (WHO) as it spreads to over 70 countries.
The Pandemic has claimed lives of over 6,000 people so far and has disrupted business across all the industries so much so that last week, the top 500 richest of the world, together, lost over $ 300 billion in a single day.
To take the problem, the policymakers and the Central banks of some of the major economies of the world are coming up with measures.
SBI Cards is India’s 2nd largest credit card issuer after HDFC. SBI Card had 94 lakh outstanding cards as of September end.
Many brokerages gave SBI Cards IPO a subscribe recommendation, justifying that though it is pricey but the segment has vast potential to grow in the coming few year given the fact that the penetration is still low.
Under the IPO process, SBI, which has the majority stake with 74% divested 4% of its holding and Carlyle Group which held the other 26% divested 10% stake. Axis Capital, Kotak Mahindra Capital Company (KMCC), Nomura Financial Advisory and Securities (India), DSP Merrill Lynch, SBI Capital Markets and HSBC Securities and Capital Markets (India) were the chief managers for the IPO.