The most awaited IPO of SBI Cards and Payment Services Limited (SBI Cards) is the latest IPO hitting Dalal Street on Monday (March 02, 2020). The below article will provide you a complete overview of this company.
SBI Cards and Payments Services is in the business of issuing credit card to consumers in India. The company is promoted by one of the oldest PSU Bank of India, the State Bank of India (SBI). The company primarily generates revenue from interest charged on credit card receivables and fee income derived from interchange fees, late fees, annual card fees, and service charges. SBI Cards has a broad credit card portfolio which includes SBI Card-branded credit cards along with co-branded credit cards that bear both the SBI Card brand and their co-brand partners" brands.
Dates: March 02 to March 05, 2020
Price Band: Rs. 750 to Rs. 755 per share
Minimum Lot: 19 shares
Minimum Application Amount: Rs. 14,250 to Rs. 14,345
Total Issue Size: Up to Rs. 10,354.77 Crs (Fresh issue Rs. 500 Crs and OFS Rs. 9,854.77 Crs)
Objects of the Offer
The Net Proceeds are proposed to be utilized for augmenting the Company's capital base which will be utilized towards business and growth including extending credit to existing customers, meeting operating expenditure along with future working capital requirements that are expected to arise out of the growth of the business.
Business and Financial Overview
SBI Cards is a payment provider which is registered as a Non-Banking Finance Company with the Reserve Bank of India (RBI). SBI Cards is the 2nd largest credit card issuer of India only after HDFC Bank (market share of approx. 27%) and has a market share of 18.10% in terms of the number of credit cards outstanding as on November 2019 along with a market share of 17.90% in terms of credit card spends.
During the fiscal year 2017 to 2019, the company's total credit card spends has grown at a CAGR of 54.20% which as compared overall credit card industry which has grown at 35.60