Board of Directors of SBI Cards approve raising of Rs 1,500 crore via non-convertible debentures
During the meeting, the board of directors also approved the unaudited financial results for the June quarter, the company said in a regulatory filing.
Investors continued to express their interest in the SBI Cards and Payment Services IPO for the second day as the issue was subscribed 54.68 per cent on Tuesday afternoon. On its first day (Monday) the issue was subscribed to 39 per cent.
The IPO opened from March 2 and by 11.40 am it received bids for over 5.5 crore equity shares against issue size of more than 10 crore shares (excluding anchor book’s portion), exchanges data showed.
The SBI shareholders were the most active bidders followed by the bank employees and retail investors at 96.97 per cent, 82.04 per cent and 87.31 per cent respectively.
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Employee of the company can get the shares at a discount of Rs 75 per share on the final pricing. The price band for the IPO has been fixed between Rs 750-755 per share.
The IPO will close on March 5.
The biggest strength of the company is the SBI’s parentage, whose brand is highly trusted. The credit card-to-debit card ratio stands at 3.7 per cent for SBI Card compared with 45 per cent for HDFC Bank, 28 per cent for Axis Bank and 18 per cent for ICICI Bank, which suggests scope for SBI Card mining SBI customers.
SBI Card has higher NPAs at 2.5-2.6 per cent against an industry average of 1 per cent. It will keep credit cost for SBI Card at an elevated level of 0.4 per cent, Prabhudas Lilladher said.
SBI Cards and Payment Services – the credit card arm of the country’s largest lender State Bank of India (SBI) – aims to raise around Rs 10,350 crore through the IPO, including new shares worth Rs 500 crore and an offer for sale of 13.05 crore shares.
(With input from agencies)
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