New Delhi: The upcoming mega IPO of SBI Cards and Payments will sail through the current stock market bloodbath, the company management said on Friday while relying on the response received from the anchor investors to the IPO.
Hardayal Prasad, MD and CEO of SBI Cards, said that for qualified institutional buyers (QIBs), the subscription will close on March 4 while the issue closes on March 5 and the under-penetrated credit card market in India gives ample opportunities for growth to pure play credit card companies like SBI Cards.
But the continued erosion of stocks that hit Friday's meltdown has in some way added to the possibility of a downturn over the much-awaited initial public offering of SBI Cards and Payment Services (SBI Card).
The IPO, India's fifth largest, and the first from a pure play credit card company is set to open for subscription Monday to Thursday.
The initial public offering (IPO) of SBI Cards and Payment Services Ltd, the credit card unit of India's largest lender State Bank of India (SBI), will open for subscription on March 2.
The price band of Rs 9,000-crore IPO has been set at Rs 750-Rs 755 per equity share.
With the Sensex falling 1,500 points over the coronavirus crisis, small investors in the primary market would expect that 35 per cent of the IPO issue size is reserved for them.
Viren Jairath, vice president, Kotak Investment Banking, said that the anchor book is already open today and "we are seeing pretty good response there".
"We hope retail subscription would also follow the same pattern which it normally does. The market is a little bit on a downward trajectory which is more on macro environment like coronavirus. Our roadshows were completed in January and we have seen very strong response from both QIBs and HNIs (high networth individuals) we have met. On that basis we decided to go ahead with the IPO. We believe it is going to be a pretty overwhelming response", he said.
SBI Cards is 74% owned by the SBI while Carlyle Group owns the remaining 26%. Carlyle bought the stake in 2017 from GE.
As part of the IPO, SBI will divest 4% of its stake, while Carlyle will sell 10% of its stake.
Hardayal said SBI Card's NPA is at 2.47%. SBI Cards IPO comprises issue of fresh equity shares aggregating to Rs 500 crore and an offer for sale of nearly 13 crore shares.
SBI and Carlyle Group will offload 3.73 crore shares and 9.32 crore shares respectively.