This Article is From Mar 16, 2020

Weak Listing For SBI Cards; Shares Fall 12% At Debut

The IPO opened at a discount of Rs 94 or 12.4 per cent at Rs 661 as the worsening scenario on coronavirus continues to batter the markets.

Weak Listing For SBI Cards; Shares Fall 12% At Debut

At 10:10am, the stock was trading at Rs 745, lower by Rs 9 or 1.4 per cent, on the BSE.

SBI Cards and Payment Services shares made a weak debut in the markets on Monday, with shares listing at a discount of around 12 per cent compared with the issue price, as the worsening coronavirus scenario continued to batter the markets. The SBI Cards shares opened lower by Rs 94 or 12.4 per cent at Rs 661 on the BSE, compared to the issue price of Rs 755 per share. The SBI Cards stock recouped most of the early losses in the first few minutes of trade.

Here are 10 things to know about the listing of SBI Cards shares:

  1. At 10:10 am, SBI Cards traded at Rs 745, lower by Rs 9 or 1.4 per cent, compared with a 4.7 per cent loss in the benchmark S&P BSE Sensex index.

  2. The SBI Cards IPO - which remained open for subscription from March 2 to March 5 - was subscribed 26.5 times. 

  3. SBI Cards and Payment Services, which is a credit card arm of the country's largest lender by assets, State Bank of India (SBI), had fixed a price band of Rs 750-755 per equity share for bidding under the IPO.

  4. The shares were issued at the higher end of the band at Rs 755 per share. The IPO comprised a fresh issue of shares worth Rs 500 crore and an offer for sale (OFS) of around 13.05 crore shares. And the bids were made in lots of 19 shares.

  5. The IPO was the first by a credit card issuer and the fifth largest by any company in India.

  6. Launched by SBI and GE Capital in October 1998, the New Delhi-headquartered SBI Cards is 74 per cent owned by State Bank of India and 26 per cent by Carlyle Group. SBI and the Carlyle Group bought the stake of General Electric's lending arm in SBI Cards in December 2017.

  7. SBI Cards has generated profits in the past three financial years. SBI Cards' net profit increased from Rs 372.86 crore in fiscal year 2017 to Rs 862.72 crore in fiscal year 2019. Total income increased from Rs 3,471.04 crore to Rs 7,286.84 crore during this period.

  8. Many brokerages had given a 'Buy' recommendation on the SBI Cards IPO due to the growth prospects of the company and the low penetration levels of credit cards in India. 

  9. The market was anticipating a 30-35 per cent listing premium for the mega issue, given the high demand for the shares and the premium commanded in the grey market.

  10. However, the ongoing market correction, triggered by the black swan event of coronavirus, seemingly dampened the sentiments surrounding the counter.