SBI Cards and Payment Services Ltd, backed by State Bank of India and private equity firm Carlyle Group, is targeting an early-March launch for its ₹9,000-crore initial public offering (IPO), two people aware of the development said.
The credit card company, which received a go-ahead from markets regulator, the Securities and Exchange Board of India (Sebi), last week, is planning to open its anchor book for institutional investors around the end of February, followed by the main book launch in the first week of March, said the first of the two persons, both of whom spoke on condition of anonymity.
The share sale will mark the largest-ever public market exit for a PE firm in India. It will also be the first IPO of 2020.
SBI, which owns a 74% stake in the unit, and Carlyle Group, which holds 26% through its subsidiary CA Rover Holdings, will together sell 130.5 million shares. SBI and Carlyle will pare their stakes by 4% and 10%, respectively, via the initial share sale.
“It is expected to be launched at the end of the month, although the final timelines are expected to be frozen in a day or two. The share sale was initially planned for January, but the Sebi approval process took longer than expected, resulting in the IPO being pushed by more than a month," the second person said.
SBI Cards declined to comment citing compliance issues.
Investment banks Kotak Mahindra Capital Co., Axis Capital, BofA Securities, HSBC, Nomura and SBI Capital Markets are managing the IPO. SBI Cards is the second-largest credit card issuer in India with 9.46 million cards outstanding and an 18% market share as on 30 September 2019. HDFC Bank leads the Indian market with 13.3 million credit cards, while ICICI Bank comes third with 7.9 million cards, according to data from the Reserve Bank of India.
SBI Cards started operations in 1998 as a joint venture with GE Capital Corp. In December 2017, GE Capital sold its 40% stake in the company to SBI and Carlyle.
The company offers a range of SBI Card-branded credit cards, and co-branded credit cards, such as lifestyle, rewards, travel and fuel, shopping, banking partnership cards and corporate cards, to individual cardholders as well as corporate clients.
It is also the largest co-brand credit card issuer in India, according to a Crisil report, having partnerships with Air India, Apollo Hospitals, BPCL, Etihad Guest, Fashion Big Bazaar (fbb), Indian Railway Catering and Tourism Corp. Ltd (IRCTC), Ola Money and Yatra.
The company sells credit cards through its 33,086 outsourced sales personnel across 133 Indian cities and the 22,007 SBI branches in India.
Further, it also had 3,009 open market points of sale as on 30 September 2019.
For the six months to last September, SBI Cards reported revenue growth of 36% to ₹4,363.9 crore from a year-ago. Its profit jumped 78% to ₹1,034.58 crore during the period.