Markets

SBI Cards upbeat on ₹9,000-cr IPO; the issue opens on March 2

Our Bureau Mumbai | Updated on February 25, 2020 Published on February 25, 2020

Fixes price band at ₹750-755 a share

Bullish about the credit card business, SBI Cards and Payment Services on Tuesday said that the zero merchant discount rate (MDR) will not be a challenge for it.

“Nothing has been talked about for credit cards. I don’t expect MDR to be a challenge for the company,” said Dinesh Kumar Khara, Managing Director, SBI.

SBI Cards Managing Director and CEO Hardayal Prasad also said that MDR for credit cards is not on the table. The company has had several rounds of discussion with the government on the issue. Prasad further said that the country’s second largest card issuer plans to keep the proportion of non-performing assets at 2.4 per cent to 2.5 per cent of its total assets.

As of December 31, its gross NPAs stood at 2.47 per cent of gross advances.

Prasad also remained optimistic about consumer spends and repayments despite the current economic slowdown.

SBI Cards and Payment Services, which is the credit card subsidiary of State Bank of India, is set to launch its initial public offering on March 2. The price band is fixed at ₹750-755 a share.

It plans to raise about ₹9,000 crore through a fresh issue of equity shares worth ₹500 crore and an offer-for-sale of up to 13.05 crore equity shares.

The issue will close on March 5.

As of December 31, 2019, SBI owns 74 per cent stake in the company while CA Rover Holdings, an affiliate of the Carlyle Group, owns 26 per cent equity.

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Published on February 25, 2020
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