SBI Cards File India’s 5th Biggest IPO Ever; Rs 9600 Crore Of Shares Will Be Sold At A Valuation Of Rs 65,000 Crore

State Bank of India, India’s biggest Public Sector Bank in India, with a network of over 15,000 branches spread across the lengths and breadths of the country has a piece of information, which we’d eagerly like to share with you.

It turns out that SBI Cards and Payment Services Ltd, SBI’s credit card unit filed initial share sale documents on Wednesday, which could comprehend the company selling shares worth around Rs 9,600 crore.

SBI’s Possible Share Sale

The share sale conducted by the credit card unit of the country’s largest lender yesterday, is poised to become the fifth-largest IPO in the country after Coal India Ltd, Reliance Power Ltd, GIC Re, and Oil and Natural Gas Corp. This could help the bank raise funds to boost credit growth.

SBI holds 74% stake in the unit, sharing this with the private equity firm Carlyle Group that holds the rest 26% through its subsidiary CA Rover Holdings. They’ll together sell 130.5 million shares through this IPO.

It has also been informed that the secondary component of the IPO could be Rs 9,100 crore, giving a partial exit to both its shareholders. While Carlyle is looking to sell 10% stake via the IPO, SBI would sell 4% stake in the company.

The initial share sale also includes a fresh issue of shares that shall help the company raise Rs 500 crore to augment its capital base and for business growth. Fortunately, the secondary markets have seen some recovery, spurring some activity in the IPO market. However, many small-cap companies are still finding it tough to get the desired pricing.

SBI Cards and More

SBI Cards is the second-largest credit card issuer in the country with 9.46 million credit cards. They had an 18% share of the Indian credit card market until September 30.

HDFC Bank has the largest credit cards business in the country with 13.3 million cards issued, while ICICI Bank stood third with 7.9 million credit cards, as of 30 September, according to data from the Reserve Bank of India.

For the six months to September, SBI Cards reported a revenue jump of 36% to Rs 4,363.9 crore from a year ago. Its profit jumped 78% to Rs 1,034.58 crore during the period.

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