It seems retail investors are learning fast to exit from a stock, which does not move according to his/her expectations. SBI Cards & Payment Services, which hit the market during March first week saw a quick exit by retail investors within 15 days of listing.

The stock has been at the receiving end, as the market turned extremely weak, post its listing due to Covid-19 pandemic. The stock, which on Monday crashed 15 per cent to ₹505.60, hit the market at a price of ₹755 on March 16. This reflects, a fall of 33 per cent from IPO price. According to a disclosure made by the company to the bourses, some 4.24 lakh small retail investors — categorised as having share capital up to ₹2 lakh — have already exited. At the end of March 31, 2020, the number of retail investors holding stake in the company dropped to 18.94 lakh. In the IPO, 23.18 lakh small investors were allotted shares. The holding as a percentage too dropped to 5 per cent from 5.55 per cent, in the company.

On the other hand, foreign portfolio investors (FPIs) and mutual funds have increased their stake.

While the number of FPIs increased to 143 from 135, their holding moved up to 4.07 per cent (3.53 per cent). Though the number of MFs holding SBI Cards decreased to 25 from 27, their holding doubled to 3.06 per cent from 1.6 per cent.

HNIs too press exit button

High net worth individuals too reduced their holding in SBI Cards to 0.57 per cent from 1.8 per cent. In all, 184 HNIs exited from the company. There is no big change in other investors, such as alternative investment funds, insurance companies and NRIs.

According to a market analyst based at Chennai, one has to see the employees movement on the stock. As the shareholding pattern does not describe staff portion separately, possibly most of the exits could be from them, he guessed. The employee portion during the IPO got subscribed by 4.85 times.

Investment advisory firm, Macquarie in March recommended SBI Cards with a target price of ₹1,025. According to Macquarie, which initiated the stock with ‘outperform’ rating said SBI Cards’ strong parentage, market leadership, brand and smart strategies will enable it to capture a rising share of India’s fast-growing credit card industry. “Regulatory intervention risks and asset quality cycles are inevitable, but not imminent in our view,” it added

Earlier, SBI Cards & Payment Services’ ₹10,350-crore IPO received an overwhelming response from all category of investors, especially record investments from qualified institutional investors. The IPO got subscribed by about 23 times overall. Ahead of the IPO, the company had raised ₹2,769 crore from 74 anchor investors.

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