SBI Cards IPO: Institutional investors pour in Rs 1 lakh crore; issue oversubscribed 15 times

By: |
March 4, 2020 6:02 PM

SBI Cards and Payment Services IPO saw a bumper response from institutional bidders on the third day with Qualified Institutional Investors alone putting in bids worth over Rs 1 lakh crore.

Overall, SBI Cards IPO was oversubscribed 15.49 times at the end of the third day, with oversubscription under every category.

SBI Cards and Payment Services IPO saw a bumper response from institutional bidders on the third day with Qualified Institutional Investors alone putting in bids worth over Rs 1 lakh crore. The quota reserved for QIBs was massively oversubscribed — 57 times — with bids worth about Rs 1.04 lakh crore pouring in against Rs 1,830 crore worth of shares on offer for them. SBI Cards public issue will remain open for another day for bidding only by retail individual investors and high net-worth individual investors. The entire issue size is Rs 10,350 crore, including about Rs 2,500 crore raised from anchor investors.

Overall, SBI Cards IPO was oversubscribed 15.49 times at the end of the third day, with oversubscription under every category. Non-institutional Investors (NII) portion was subscribed 2.19 times. SBI Employees — getting the shares at a discounted price of Rs Rs 675-680 — subscribed the issue 3.29 times against their quota. Existing SBI shareholders bid 3.53 times for their reserved portion. Retail investors, who still have one more day to go before the bidding closes, subscribed to the SBI cards IPO 1.77 times.

With the end of bidding on day three, SBI Cards IPO joins the likes of Reliance Power and Coal India in the Rs 1 lakh crore IPO club. State Bank of India and PE firm Carlyle group have offered over 10 crore shares in the IPO along with a fresh issue of Rs 500 crore. After the IPO, State Bank will reduce its holding in the card issuer to 69 per cent from the current 74 per cent and Carlyle group’s shareholding will drop to 16 per cent from the current 26 per cent.

Analysts are already upbeat about SBI Cards with brokerages already starting to cover the stock and putting a target price against it. While LKP Securities sees an upside of 62 per cent on the issue price for SBI Cards,  brokerage firm Prabhudas Lilladher has put a ‘buy’ call on SBI Cards, giving it an expected target price of Rs 1,191.

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