IPO
All you need to know about the Pre-IPO and Post-IPO buzz of SBI Cards-
By AKSHAY IYER
Shares of SBI Cards and Payment Services jumped 8 per cent on Tuesday, a day after its debut on stock exchanges, even as the broader market remained depressed.
The stock ended the day at Rs 736.10, up 8.03 per cent on NSE. On Monday, the scrip got listed at Rs 658 on the BSE, about 13 per cent discount to its issue price of Rs 755. The scrip ended the first day at Rs 683.20, down 9.51 per cent against issue price.
“SBI Cards are the second largest issuer of credit cards in India”
Incorporated in 1998, SBI Cards and Payment Services Limited is a subsidiary of SBI, India’s largest commercial bank in terms of deposits, advances and the number of branches. SBI currently holds (along with its nominees) 689,927,363 Equity Shares, constituting to 74.00 % of the pre-Offer issued, subscribed and paid-up Equity Share capital of the Company.
The company the 2nd largest credit card issuer in the country, with a 17.6% and 18.1% market share of the Indian credit card market (number of credit cards) as of March 31, 2019, and November 30, 2019, respectively, and a 17.1% and 17.9% market share of the Indian credit card market ( total credit card spends) in fiscal 2019 and in the eight months ended November 30, 2019.
SBI Cards offers a wide range of credit cards to individual and corporate clients including lifestyle, rewards, shopping, travel, fuel, banking partnership cards, and corporate cards, etc.
SBI Cards has partnered with several leading names across industries, including Air India, Apollo Hospitals, BPCL, Etihad Guest, Fbb, IRCTC, OLA Money and Yatra, amongst others.
As a subsidiary of SBI, the company has access to SBI’s extensive network of 21,961 branches across India. The partnership enables it to market its cards to a huge customer base of 445.5 million customers.
Market Performance in the coming times-
Macquarie Research has initiated coverage on the stock with an outperform rating and a target price of ₹1,025, indicating a 36% potential upside, stating that India’s only notable standalone credit card company and having growth visibility should ensure premium valuations can be sustained. “We believe SBI Cards can deliver a 32% earnings per share (EPS) compounded annual growth rate (CAGR) with an average return on equity (RoE) of 28% over FY20-23, driven primarily by over 25% growth in cards outstanding,” the foreign brokerage firm said in a note on Monday.
Customer Acquisition -
Diversified customer acquisition network and large product suite comprising the largest number of co-branding partnerships enable better customer engagement across multiple channels.
Market Share:
HDFC has the highest market share in the country.
SBI being the 2nd largest in market cap of credit cards.
Total other bank’s credit card market share.
IPO Check
Depending upon the current situation of the economy, slowdown and panic of Covid-19, SBI has performed lower than expected
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