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State Bank of India, the country’s largest commercial bank, will look to sell up to 4 per cent stake in its credit card venture, SBI Cards and Payment Services Limited (SBl Card), through an initial public offering (IPO) under the offer-for-sale route. The final approval for the divestment came at a meeting of the executive committee of the Central Board of Directors on Thursday, said sources close to the development. Although it was known that SBI was looking to take its card venture SBI Card public, the actual quantum of stake sale was not known earlier. Currently, SBI holds 74 per cent stake in the credit card venture, while the remaining 26 per cent is with Carlyle Group.
It may be recalled that SBI’s Central Board had, in August this, year given its in-principle approval for the stake sale and IPO. As much as 3.73 crore equity shares are proposed to be offered in the upcoming IPO, which is likely to hit the markets early next year.
SBI Card, which is the second-largest credit card issuer, recently crossed a new milestone with its cards-in-force (CIF), crossing the 90-lakh-mark. It increased from 60 lakh to 90 lakh in 1.6 years.
CIF is a financial term that represents the number of cards issued and outstanding. In a span of eighteen months (from February 2018 to July 2019), SBI Card added 30 lakh credit cards to its overall credit card base.
SBI Card’s growth in spends stood at around 35 per cent year-on-year in FY2019. This was higher than the industry benchmark of 31 per cent.
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