SBI Cards and Payment Services’ initial public offering (IPO) saw plenteous response through-out the four-day bidding process, eliciting an oversubscription of 26 times at the end of the bidding process.
SBI Cards and Payment Services’ initial public offering (IPO) saw plenteous response through-out the four-day bidding process, eliciting an oversubscription of 26 times at the end of the bidding process. Bids were received for a total of 266 crore shares against the 10 crore shares that were offered under various categories, translating to more than Rs 2 lakh crore. The Rs 7,581 crore SBI Cards IPO was oversubscribed 57 times by Qualified Institutional Buyers (QIB), putting in bids worth Rs 1.04 lakh crore alone. Non-institutional Investors (NII) potion was oversubscribed 45 times.
Retail individual investors portion was oversubscribed by 2.5 times, bidding for more than 16 lakh shares. Existing SBI shareholders oversubscribed their portion by 25 times. SBI employees who were offered a Rs 75 discount per share oversubscribed the issue by 4.74 times. Bids from NIIs multiplied on the final day of the bidding process, going from oversubscription of 2.19 times at the end of day three to 45 times oversubscription at the close of the bidding process.
SBI Cards IPO — the fifth-largest IPO to enter the Indian market– after securing over Rs 2 lakh crore in the four-day bidding process joins the likes of Reliance Power, Coal India and Mundra Port in the Rs 1 lakh crore IPO club.
The entire issue size of Rs 10,350 crore saw Rs 2,700 crore come in from anchor investors before the IPO bidding started on Monday. Promoter State Bank of India will see its stake come down to 69 per cent after the IPO process and PE firm Carlyle group will cut its stake from 26 per cent right now, to 16 per cent. The IPO includes a fresh issue of Rs 500 crore.
With the bidding process now over, focus shifts to the listing of SBI Cards on the stock exchanges. Analysts expect that SBI Cards, which is the second-largest card issuer in the country will perform well in the market being the only player to have entered the bourses and having the advantageous backing from State bank of India. Seeing the performance of SBI Cards IPO, analysts are giving a listing day target price of Rs 1200. Citing rising discretionary spends and non-cash economy, brokerage firm Prabhudas Lilladher has initiated coverage on SBI Cards IPO, giving it an expected target price of Rs 1,191 with a ‘buy’ rating.