The initial public offering (IPO) of the second-largest credit card company, SBI Cards and Payment Services, has been subscribed more than 39 percent (nearly Rs 3000 crore) on day 1. According to the latest update, the issue has received record-breaking 8.52 lakh applications.
So far, the issue has received bids for 3,94,54,754 shares against the issue size of 10,02,79,411 shares, according to data available on the NSE.
The retail portion of the issue was subscribed 62 percent, while the shareholders subscribed 69 percent on Day 1.
The
issue has opened for subscription on March 02 (today) with a price band of Rs 750-755 per share. The minimum amount one can invest by subscribing a lot of 19 shares is Rs 14,345.
The company aims to raise Rs 10,355 crore through this IPO. It has already
raised Rs 2,769 crore from 74 anchor investors, including 12 mutual funds.
The IPO comprises a fresh equity issue worth Rs 500 crore and a total dilution of around 14 percent is expected to be done through SBI Cards IPO via an Offer For Sale (OFS) route.
Brokerages have recommended subscribing to this IPO as SBI Cards is the second-largest credit card company in the country.
“Given its dominant position in the credit card market and strong parentage, SBI Cards is well placed to benefit from the rising trend of digital payments and e-commerce,” said Motilal Oswal.
The company has strong support from its parent, State Bank of India.
“Strong growth, stable asset quality, and superior return ratios provide comfort and justify the premium valuation. Further, being the first in the segment to get listed, it could generate high investor interest,” Motilal Oswal added.
Thus the brokerage recommends subscribing to the IPO.
First Published: Mar 2, 2020 1:12 PM IST
