- SBI Cards and Payment Services will sell shares in the upcoming initial public offering (IPO) opens today and will go on till March 5.
- The shares will be priced between ₹750 to ₹755 a piece and it is expected to be the first blockbuster IPO this year.
- institutional investors who are offered shares before the IPO opens pumped in nearly $400 million in the company, which has nearly a fifth of the country's credit card market.
SBI Cards has raised ₹2,769 crore (nearly $400 million) from 74 anchor investors, including the Singapore government, the Monetary Authority of Singapore, HDFC Mutual Fund, Government Pension Fund Global, and Birla Mutual Fund. Anchor investors are institutional investors who are offered shares before the IPO opens.
At the price set, the stock may beat 16 Nifty companies— the likes of Mahindra & Mahindra, Eicher Motors, Tata Motors, Hero MotoCorp, Hindalco, Bharti Infratel, Cipla, and Zee Entertainment— in market value at the time of listing, according to one estimate. Is the craze over a credit card seller justified.
These are some details about SBI Cards that you must know to make sense of the frenzy.
The industry
In the four years ending March 2019, credit card spends in India have grown at a high compounded rate of 32% and yet, there are only four cards for every hundred persons in India. That’s an abysmally low and the penetration level can only go up from here.