All About SBI cards & payments IPO

Issue Opens on: 20 January 2020
Issue Closes on: 22 January 2020
Issue Type: Book Built Issue IPO
Issue Size: 13,86,17,412 Shares
Face Value: Rs.10/- per Share
Issue Price: Rs.615 – Rs.618 per Share *(Tentative) (Revised)
Discount: Rs.18/- (for Employees)
Market Lot: 24 Shares
Listing At: NSE, BSE

SBI Cards initial public offer (IPO), which aims to raise around ₹9,600 crore (at a valuation of 53,000-60,000 crores) and is awaiting regulatory approval, is set to be India’s biggest IPO this year.

With a market share of 18%, SBI Cards is the second-largest credit card issuer in the country with 9.46 million credit cards as on 30th September. According to the draft prospectus, the company expects the number of credit cards to increase at an annual rate of 25% per year.

How do credit companies make money?

Interest income contributes to 50% of total revenues. All credit card companies want the credit card holder to roll over or revolve their credit payment, convert to EMI or take loan on their credit card. This allows them to charge hefty interest income on an annualised basis.

25% of income comes from intercharge fees. This is the fee charged from a merchant by a credit card company to undertake the risk of making the payment, and ensuring that the payment is credited to the respective merchant. This fee should grow well as consumption grows meaningfully in India.

Bulk of the remaining 25% of revenues is contributed by over limit fees, late payment fees, cash withdrawal fees and cheque bounce charges.

Pipeline ipo and it’s parent company. Better to buy one share of parent… Experts please add any other pipeline IPOs..

1. SBI card – parent – SBI
2. Hdb finance – parent – hdfc bank
3. Equitas small finance bank – parent – Equitas
4. Bajaj energy – parent – Bajaj Hindustan
5. PNB MetLife – parent – PNB
6. Reliance retail – parent – reliance
7. Reliance jio – parent – reliance

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