On 15 May 1998, the State Bank of India launched SBI Cards and Payment Services to issue credit cards and deal with payment goods. In addition to issuing fresh IPO stock, SBI will sell a portion of its promoter assets. The Carlyle Group, which in December 2017 had taken up a stake in SBI Cards, will also be offering part of its stake in the question.
Shares were reserved on Thursday for SBI Cards and Payment Services, as the markets experienced a bloodbath. Initial public offer (IPO) for SBI Cards saw a bumper response from investors dodging coronavirus fear to bid for the issue. The country’s second-largest credit card issuer has received bids above 266 crore shares against the 10 crore shares offered.
SBI Cards, the affiliate of India’s largest bank, The State Bank of India (SBI). SBI Cards provides the widest range of credit card catering with great benefits to all forms of customer needs such as shopping, eating, transportation, fuel, and movies among others, and steal deals. With a wide array of partner stores, hotels, hospitals, airlines, leisure, travel.
SBI Cards IPO has been oversubscribed twenty-six times, which means that not all bidders will receive shares, but a lottery allocation will be made. You have changed the allocation status to search the ‘Registrar To The Offer’ website, which is Link Intime India Private Ltd. in this case.
Objects of the SBI Card IPO:
- The Offer for Sale: The aim of the Offer for Sale is to allow the Selling Shareholders to sell an aggregate value up to Rs.9,854.77 Crores of their owned shares.
- Fresh Issue(500 Crores): It is proposed to use the net proceeds from the Fresh Issue to increase the capital base to meet future capital requirements.
- Promoters And Management: The Company’s promoter is SBI and currently owns (along with its nominees) 689,927,363 equity shares, representing 74.00% of the pre-offer capital released, subscribed and paid-up.
- InvestorZone Take: In the last 3 years, SBI Card has shown tremendous revenue growth. The demand for cash decreases after the demonetization which gave impetus to credit card companies.
- Over the last 3 years, SBI Card PAT has risen from Rs. 372 to Rs.859 Crores.
- The company has 25 percent, 25 percent, and 23 percent ROE(Return on Equity) in FY16-17. 17-18 and 18-19, that is good.
- In the SBI Employees category of SBI Cards IPO, full-time or permanent SBI employees (as on the RHP filing date) may apply. The maximum limit specified in the Employee category is at least 5 lakhs. When the category is fully or over-subscribed, the maximum allocation to employees can not be higher than believed to be 2 lakhs.
- The company has a diversified revenue model whereby it generates both non-interest income (primarily comprised of fee-based Profits such as interchange fees, late fees, and annual fees, among others) as well as interest income on receivables on its credit card. Over the past three fiscal years, the share of its revenue from non-interest revenue derived from operations has steadily increased from 43.6 percent in fiscal 2017 to 48.9% in fiscal 2019. It has made their capital structure more effective and gives them a more predictable revenue mix which is less prone to market instability, such as volatility in interest rates.
- In the last three fiscal years, the firm has built a proven track record of consistently producing profits. The size of their operations coupled with their emphasis on core business and profound expertise in the industry has enabled them to develop their company.
Overview of SBI Card
- We are India’s second-largest credit card issuer, with an 18.0 percent market share of the Indian credit card market as of September 30th, 2019 in terms of the number of credit cards outstanding. SBI Card is a Member State Bank of India subsidiary.
- They give individual cardholders and corporate clients a comprehensive credit card portfolio that includes lifestyle, rewards, travel and fuel, shopping, banking relationship cards, and business cards covering all major cardholders segments in terms of income profiles and lifestyles.
- SBI Card has a large portfolio of credit cards which includes SBI Card-branded credit cards as well as co-branded credit cards carrying both the SBI Card logo and the brands of our co-brand partners.
- It offers four main SBI Cardbranded credit cards: SimplySave, simply click, Prime, and Elite, each catering to a varied set of cardholder requirements. According to the CRISIL Report, it is also India’s largest co-brand credit card issuer and has partnerships with several major players in the travel, fuel, fashion, healthcare, and mobility industries, including Air India, Apollo Hospitals among others.
- As of September 30th, 2019, it has a sales force of 33,086 outsourced sales personnel operating from 133 Indian cities. Had a presence across India at 3,009 open market points of sale.
- Furthermore, its alliance with SBI offers access to SBI’s extensive network of 22,007 branches across India, enabling it to sell credit cards to SBI’s large customer base of 43.6 Crores.
- The listing is scheduled to be on the National Stock Exchange ( NSE) and BSE on March 16. SBI Cards IPO issue size was Rs 10,350 crore, which saw Rs 2,700 crore coming in from anchor investors before IPO bidding started. The listing is scheduled to be on the National Stock Exchange ( NSE) and BSE on March 16. SBI Cards IPO issue size was Rs 10,350 crore, which saw Rs 2,700 crore coming in from anchor investors before IPO bidding started.
- Six groups of SBI Card IPO investors-retail, SBI shareholders, SBI employees, anchor, accredited institutional buyers (QIB), and non-institutional investors-were present. The State Bank of India gave the SBI employees Rs 75 discount, which means the SBI Card IPO price band was Rs 675 to Rs 680 for SBI employees.