SBI's credit card arm likely to launch IPO early next month; plans to raise Rs 9,000 cr via maiden issue

SBI Cards and Payment Services, the credit card unit of the country’s largest lender State Bank of India (SBI), may hit the market with the initial public offering (IPO) early next month. This will the first IPO of this year.

Last week, the SBI subsidiary received markets regulator the Securities and Exchange Board of India’s (SEBI) approval to float an initial public offering.

SBI Cards and Payment Services, which is backed by private equity firm Carlyle Group as well, plans to raise Rs 9,000 crore through the IPO , said a report in Mint. 

The credit card company is planning to open its anchor book for institutional investors around the end of February, followed by the main book launch in the first week of March, said the report quoting people in the know of the matter.

SBI Cards and Payment Services, which had filed draft IPO papers in November last year, obtained “observations” from the SEBI on 11 February, reported PTI.

The market regulator’s observations are necessary for any company to launch public issues including initial public offer, follow-on public offer and rights issue.

As per the draft papers, SBI Cards will offer up to 130,526,798 equity shares through offer for sale route. This will include up to 37,293,371 share sale by SBI and up to 93,233,427 shares on offer by Carlyle Group. In addition, the company will also issue fresh equity shares of Rs 500 crore.

SBI holds 76 percent in SBI Cards and rest of the stake is held by Carlyle Group.

According to market sources, the IPO size could be estimated at more than Rs 6,000 crore.

SBI Cards is the second-largest credit card issuer in India with an 18 percent market share.

Kotak Mahindra Capital, Axis Capital, DSP Merryl Lynch, Nomura Financial Advisory, HSBC Securities and SBI Capital Markets are the book-running lead managers of the issue.

Earlier in December, SBI Chairman Rajnish Kumar had said the SBI Cards IPO would be launched in the coming months.

Apart from SBI Cards, Mukesh Trends Lifestyle has also received SEBI’s go ahead on 14 February to launch its IPO.

The Ahmedabad-based company’s IPO consists an issue of up to 1 crore equity shares of face value of Rs 10 each and according to market sources, the IPO issue size will be approximately between Rs 70 and 90 crore.

-- With PTI inputs