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SBI Cards IPO concludes, subscribed 26.54 times on the final day of bidding

The IPO of the credit card arm of India's largest public-sector lender State Bank of India (SBI) received bids of over 266 crore shares against the total issue size of 10 crore shares, data available with the stock exchanges showed.

By: Express Web Desk | New Delhi | March 5, 2020 7:14:54 pm
A view of State Bank of India (SBI) bank branch and ATM (File photo, source: Bloomberg)

The initial public offer (IPO) of SBI Cards and Payment Services concluded today with the issue being oversubscribed 26.54 times on the fourth and final day of bidding on Thursday.

The IPO of the credit card arm of India’s largest public-sector lender State Bank of India (SBI) received bids of over 266 crore shares against the total issue size of 10 crore shares, data available with the stock exchanges showed.

The shares which are to be allocated for the qualified institutional buyers (QIBs) was subscribed 57.18 times, while those of non institutional investors was subscribed 45.23 times and that of retail individual investors (RIIs) was subscribed nearly 2.50 times, the data showed.

The issue closed on Wednesday for QIBs, while for other bidders it ended today.

The price range for the SBI Cards IPO was fixed at Rs 750-755 per share, and the issue had opened earlier this week on Monday (March 2).

The SBI Cards IPO comprises a fresh issue of Rs 500 crore and an offer for sale of 13,05,26,798 shares, including anchor portion of 3,66,69,589 shares. The company expects to raise around Rs 10,355 crore with the help of the IPO. It has raised Rs 2,769 crore from 74 anchor investors just days ahead of the launch of IPO.

Coming to the lot size of the offer, the SBI Cards IPO has a lot size of 19 shares, which essentially means that any investor who bid for the share had to apply for a minimum of 19 shares and thereafter in multiples of 19 such as 38 shares, 57 shares, 76 shares and so on.

Kotak Mahindra Capital Company, Axis Capital, DSP Merrill Lynch, HSBC Securities and Capital Markets (India), Nomura Financial Advisory and Securities (India) and SBI Capital Markets are the managers of the SBI Cards IPO.

In terms of stake, SBI which is India’s largest public sector bank owns 76 per cent stake in SBI Cards, while the remaining stake is held by Carlyle Group.

Now coming to the listing, shares of SBI Cards shares will be listed on both the NSE and BSE. According to brokerages, the listing likely to happen on March 16.

“The SBI cards subscription of around 26 times on the final day is in tune with the great response to quality IPOs. However, the steep valuation of the issue ( PE around 45) doesn’t offer comfort, particularly during these difficult times,” Dr V K Vijayakumar at Geojit Financial Services said in a statement.

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