SBI Cards receive SEBI nod for IPO

The Securities and Exchange Board of India (SEBI) has given its in-principle approval for the initial public offering (IPO) of SBI Cards and Payment Services, the credit card arm of State Bank of India. The company seeks to raise up to Rs 5,500-6,000 crore through the IPO.

The launch would happen towards the end of February 2020 and the and the IPO would value the company at approximately Rs 55,000-60,000 crore.

As per the Draft Red Herring Prospectus (DRHP) which was filed with SEBI in November 2019, the public issue comprises a fresh issue of Rs500 crore and an offer for sale of up to 13.05 crore equity shares. The offer for sale includes up to 3.72 crore equity shares by SBI and remaining 9.32 crore equity shares by CA Rover Holdings, an affiliate of Carlyle Asia Partners IV.

Up to 1,864,669 shares have been reserved for employees of the company whereas 13,052,680 have been reserved for SBI shareholders.

Besides, the company will also issue fresh equity shares of Rs 500 crore.

Where the Proceeds will be used?

SBI Cards intend to use the proceeds of the fresh issue for augmenting its capital base to meet future capital requirements. State Bank of India holds a 76 per cent stake in SBI Cards and the rest is held by CA Rover Holdings.

Kotak Mahindra Capital, DSP Merryl Lynch, Nomura Financial Advisory, Axis Capital, HSBC Securities and Capital Markets (India) and SBI Capital Markets are the book-running lead managers of the issue.