SBI Cards and Payment Services Limited which was incorporated in the year 1998, is a subsidiary of SBI. The State Bank of India is the largest lender in India. SBI Cards is the second largest credit card issuer in India with around 18% market share in the Indian credit card market.
SBI Cards offers credit cards in the lifestyle, rewards, shopping, fuel and travel space. It has tie-ups with leading names like Air India, Apollo Hospitals, BPCL, OLA money, IRCTC and so on.
You can subscribe to SBI Credit Cards IPO from March 2nd to March 5th 2020. The shares would be credited to your demat account on March 13th 2020. The shares of SBI Cards get listed on NSE and BSE on or around March 16th 2020.
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SBI Cards enjoys the power of the SBI distribution network. It is also India’s second largest credit card issuer with solid industry experience and track record of growth and profitability. SBI holds 76% stake in SBI Cards and the remaining 24% is held by the Carlyle Group.
The SBI Cards Price Band is likely to be in the Rs 745-775 Range.
If you hold SBI shares as on 18th February 2020 (This is the date of filling Red Herring Prospectus); you can apply under the shareholders category for SBI Cards IPO. If you apply under both shareholders and retail category, you get Rs 2 Lakhs in SBI shareholders category and another Rs 2 Lakhs in retail category.
If you are an SBI employee, the maximum limit you can apply for is Rs 5 Lakhs. If SBI IPO is oversubscribed under the employee category, a maximum bid of Rs 2 Lakhs will be accepted.
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The credit card industry in India will grow 2.5 times in the next 5 years. Millennials are spending heavily with credit cards and credit card spends are growing at a CAGR of 32% from FY 2015 to FY 2019 to reach 6 Lakh Crores. It should grow at a healthy rate and soon reach 15 Lakh Crores by 2024.
If you believe the grey market, SBI Cards IPO is trading at a 40% premium to the projected IPO price band in the grey market. A strong oversubscription is expected for SBI Cards IPO.
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Existing SBI shareholders have a strong chance of allotment under the SBI shareholders category. SBI Cards has been enjoying strong growth in the last 4-5 years. It’s expected to be a multibagger on the lines of IRCTC.
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