The SBI cards and payments services are out with its Initial Public Offering( IPO) which will be up for its subscription from Monday and those who are interested in buying shares can look forward to it till Thursday.
The SBI cards and payments services are the credit arm of the State Bank Of India which is seeking to raise close to Rs 10,350 crore by selling over 13 crore shares.
Thee offering to the price band for subscribing to the IPO has been fixed at Rs 750-755 per equity share. According to reports, it indicates that the minimum lot size for the IPO has been fixed at 19 shares, which means people willing to subscribe at the upper end will have to shell out at least Rs 14,345.
There are six investor categories in the IPO, SBI Cards and Payments Services shares which are categorized as anchor, qualified institutional buyers, non-institutional investors, retail, SBI shareholders and employees.
Analysts already expect the IPO to get a positive response in the market from investors. It may be noted that about 10 per cent or 1.3 crore shares have been reserved for employees of SBI.
The analysts say that the SBI Cards faces tough competition from new forms of credit offerings, they also believe that SBI Cards is in a good position to benefit from the rising trend of digital payments and e-commerce.
Despite the rich valuation of the IPO, analysts believe that strong growth, stable asset quality and superior return ratios will provide comfort to subscribers and that it justified the premium valuation.
SBI Cards have so far enjoyed good revenues and profit has more than doubled over the past three years. Its net profit rose to Rs 862 crore in fiscal 2019 from Rs 372 crore in FY17. Revenues from operations also increased to Rs 6,999 crore in fiscal 2019 from Rs 3,346 crore in FY17.
It is likely to generate high investor interest as many brokerage firms have already recommended subscribing to the IPO.
