It’s IPO Season And SBI Card is Coming up With the Most Awaited IPO of 2020.
You May Have Question like What is SBI Card, What’s the Date Of IPO or How To Apply For SBI Card IPO.
So Today We are Going to Explain Everything About SBI Card IPO From Company overview to How to Apply For this IPO.
So Let’s Get Started
SBI Card IPO Details:
| Open Date | 02 Mar 2020 |
| Close Date | 05 Mar 2020 |
| Total Shares | 137,193,464 |
| Face Value | ₹ 10 |
| Issue Type | Book Building |
| Issue Size | ₹ 10354.77 Cr |
| Lot Size | 19 Shares |
| Price Band | ₹ 750-755 |
| Employee Discount | ₹ 75 |
| Listing At | NSE, BSE |
| Listing Date | 16 Mar 2020 |
| Market Cap | ₹ 70890 Cr |
Important Dates
| Opens On | 2 Mar 2020 |
| Closes On | 5 Mar 2020 |
| Basis of allotment | 11 Mar 2020 |
| Refunds | 12 Mar 2020 |
| Credit of share | 13 Mar 2020 |
| Listing Date | 16 Mar 2020 |
| Mandate end date | 19 Mar 2020 |
Promoter Holding
| Pre Issue | 74% |
| Post Issue | 69.51% |
Note: SBI Card is a separate legal entity that is responsible for issuing SBI branded credit cards in India. It is different From SBI Bank.
Page Contents
SBI Card Overview:
SBI Cards and Payment Services Limited is a subsidiary of State Bank of India, India’s largest commercial bank. Incorporated in 1998, SBI Card is the 2nd largest credit card issuer in the country with an 18.0% market share of the Indian credit card market (number of credit cards) as of September 30, 2019.
SBI Card offers a wide range of credit cards to individual and corporate clients including lifestyle, rewards, shopping, travel, fuel, banking partnership cards, Cobranded Cards and corporate cards, etc. The company has partnered with several leading names across industries including Air India, Apollo Hospitals, BPCL, Etihad Guest, Fbb, IRCTC, OLA Money and Yatra.
As a subsidiary of State Bank Of India, the company has access to SBI’s extensive network of 22,007 branches across India. The partnership enables it to Offer its cards to SBI’s huge customer base of 436.4 million customers.
Headquartered in New Delhi, as of September 30, 2019, SBI Card has a sales force of 33,086 outsourced sales personnel operating out of 133 Indian cities.
The Carlyle Group had made a private equity investment in SBI cards in December 2017.
Company Financials:
- Total Income Increased from ₹5370.1 Crores in FY2018 to ₹7286.8 Crores in FY2019
- Revenues from Operations have Increased from ₹5,187 Crores in FY2018 to ₹6999 Crores in FY2019.
- Net Profit Increased from ₹601.1 Crores in FY2018 to ₹862.7 Crores in FY2019.
- In the First Half of FY20, The Company Reported a Net Profit of ₹725.8 Crores and a Revenue of ₹4,677 Crores.
- ROAE(Return on Average Equity) has Remained Stable at 28.5% in FY2017 and 28.4% in FY2019, while ROAA(Return on Average Assets) Increased from 4.0% in FY2017 to 4.8% in FY2019.
- Total Cards Issued Increased From ₹63 Lakhs in FY2018 To ₹83 Lakhs in FY2019.
- Average Spend on Card Increased From ₹1.41 Lakhs in FY2018 to ₹1.45 Lakhs FY2019.
Revenue Model:
Interest Income: (49%)
Interest Income is the Major Source Of Income For SBI Cards. It Contains Intrest Generated From EMI, Late Payment of Credit Card Dues.
Fee-Income: (44%)
Annual Card Fees, Joining fees, Late Payment Fees, Currency Markup Fee, Cash Advance Fee, Over-Limit Fee, Reward Redemption fee, among others, Are Also A Major Source Of Income For SBI Card.
MDR (Merchant Discount Rate): (~7%)
This is The Fee That Company charges To the Merchant for Providing a Facility to Accept Credit Card As a Payment Method.MDR Fees are Mostly Charged Between 2-3% of Total Transaction.
Competitive Strengths:
- India’s 2nd largest credit card issuer in India after HDFC Bank with 83 lakhs Credit card issued.
- A diversified portfolio and partnerships with leading brands across industries.
- Diversified customer acquisition capabilities
- Supported by a strong brand and pre-eminent Promoter like SBI.
- Advanced risk management and data analytics capabilities:
- Modern and scalable technology infrastructure
- The highly experienced and professional management team
Opportunity:
- The business of credit cards in India is Underpenetrated right now. There Is So much Opportunity of Growth For SBI Card. Money From This SBI Card IPO will help to Accelerate Growth.
- As we are moving towards a cashless economy, the growth of a Credit Card is inevitable.
Risks:
- A Slowdown in the Economy.
- Loss of a job has the Hign Impact on Credit card payment.
- Growth Of UPI (Unified Payment Interface).
Some FAQ’s Regarding SBI Card IPO:
When SBI Card IPO is coming?
SBI Cards IPO’s Opening Date is 2nd March and Closing Date is 5th March.
SBI Card IPO Share Price(Price Band):
Price Band of SBI card IPO is From 750 to 755.
SBI Card IPO Lot Size:
Lot Size of SBI Card’s IPO will be 19 shares per lot for Retail customers.
What is the Market valuation of the SBI Card?
The Market Valuation After IPO Will Be ₹70890 Cr
What If I’m SBI Shareholder(Shareholder Quota)?
SBI shareholders can apply in both, Retail Investor(RII) as well as shareholder category with the maximum limit of ₹200,000 in each.(Only if You hold the SBI shares before 18th Feb 2020)
What If I’m SBI Employee?
SBI Employees will Get Discount of ₹75.
What are SBI Card listing and allotment date for SBI cards?
Sbi Card’s Shares will be allotted on 11th March and will be listed on Stock Market on 16th March.
What happens after I apply?
If the issue is oversubscribed you (and everyone else in retail category) have an equal right, either zero or one lot. If You Got Allotment, Congratulations Your Demate Account Will be Credited on 13th March.
How many Lots to apply?
You Can Apply For Maximum of 13 Lots as a Retail Customer.
Is SBI Card IPO Worth it?
Understanding The Potential Of This Industry, YES.
SBI Card IPO Prospectus:
How To Apply For SBI Card IPO Online/Offline?
You need a Brokerage Account and a Demat account. Then either apply Online Through Your Broker’s Portal (or via App) Yourself or Call Your Broker.
- Use Net Banking by Bank: This is the easiest way to apply in an IPO. Simply log in to your net banking with any bank where you have your bank account and apply in SBI Card IPO shares.
- Use UPI based IPO Application: If your broker offers an IPO application, you could apply through them using the UPI payment gateway. If You have Demate Account With Zerodha, Follow This Guide.
My Take:
- SBI Card has shown Tremendous Growth in Terms of Revenue in recent Quarters.
- After Demonetization, The Demand for Cash Declined which has given Boost to Credit Card Companies.
- Predicting The Growth Of Credit Card in India Considering the Under Penetration It will a Good Bet To Invest In SBI Card IPO.
I’m Going To Apply For This IPO, Are You?
Let Me Know in The Comments.
DISCLAIMER: THIS IS NOT INVESTMENT ADVICE. I’m Not a Financial Advisor, Read the offer document carefully before investing.