SBI Cards IPO: Retail investors, shareholders, employees bullish; subscription at 48% so far

Investors continued to show their interest in the SBI Cards IPO as the issue was subscribed 48 per cent on Tuesday morning after registering a positive response from retail investors, SBI shareholders and SBI employees. The issue was subscribed to 39 per cent on Monday. SBI Cards IPO opened for subscription on March 2 and will remain open till March 5. From a total of 10 crore shares on offer 4.81 crore were subscribed till 11 AM on Tuesday. Retail investors bid for 3,28,23,298 shares against the 4,27,96,641 shares offered under the category. 

SBI employees were the most active bidders among all the categories, bidding for 15,21,216 shares, making up 82 per cent of the offered shares. SBI employees have been given a discount of Rs 75 per share in the IPO. On the other hand, SBI shareholders too were not shying away from the opportunity, bidding for 1,10,00,000 shares against the offered 1,30,52,680 shares. Non-institutional investors and Qualified Institutional Buyers (QIB) were the only two categories that did not mirror the interest of investors on the first day. QIBs bid for 24,000 shares against the 2,42,24,003 offered to them and Non-institutional investors bid for more than 28,35,000 shares from the 1,83,41,418 offered.

SBI cards IPO will close on March 4 for all except retail investors who will have an extra day to subscribe to the IPO. SBI Cards and Payment Services is expecting to raise Rs 10,341 crore from the IPO which will see Carlyle Group and State Bank of India reduce their stake to 16 per cent and 69 per cent, respectively.The plan also includes a fresh issue of stock worth Rs 500 crore. 

Analysts are already upbeat on SBI Cards IPO and have recommended to subscribe to the issue, seeing an upside of as much as 62 per cent as noted by LKP securities. SBI Cards has strong backing in form of State Bank of India and has the second largest customer base when it comes to cards in India. The cards industry has seen a strong surge in user base after demonetisation in 2016 and analysts at various brokerages hope that as millennials continue to enter the jobs market usage of credit cards will increase further benefiting SBI Cards and other players directly.