Oversubscription of SBI Cards IPO despite weak sentiments
SBI Cards and Payment Services Private Limited (SBICPSL), which hit the primary market on Monday (March 2, 2020) to raise almost 10,351 crore has been subscribed nearly 1.8x till 11.30 am on Wednesday, as per NSE data. The issue comprises Rs 500 crore of fresh issue and rest is an offer for sale, where SBI and CA Rover Holdings (Carlyle) both, will divest nearly 13.05 crore shares. A fresh issue of Rs 500 crore is to be used for augmenting the capital base.
The market sentiments post confirmed cases of coronavirus in India has been weakened, which has weighed on the IPO of SBI Cards but despite this, the IPO has been oversubscribed!
All categories except non-institutional got fully subscribed till 11.30 am.
| Category |
Subscription |
| Qualified Institutional |
3.5x |
| Employee reservation |
1.85x |
| Others |
1.72x |
| Retail Investors |
1.41x |
| Non-institutional |
0.58x |
March 5 is the last day for the subscription to this IPO. SBI Cards and Payment Services is the subsidiary of SBI and enjoy the market share of almost 18 per cent in India, offering an extensive credit card portfolio. It is the largest co-brand credit card issuer, having partnerships with several major players.
At the higher price band of Rs 755 and on the expanded equity base considering the IPO, the offer is demanding a price to book (P/B) value of 12.6 times after annualising the finances of 9MFY20. The price to earnings at which it is available is 45.8 times.