SBI Cards and Payment Services, the second-largest credit card provider in India, has filed draft red herring prospectus with capital market regulator Securities and Exchange Board of India (SEBI) on November 26.
The issue consists of fresh issue of Rs 500 crore and an offer for sale of 13,05,26,798 equity shares by State Bank of India and CA Rover Holdings, an affiliate of US-based Carlyle Asia Partners IV.
Of the total offer for sale, SBI will sell up to 3,72,93,371 equity shares and CA Rover up to 9,32,33,427 equity shares through IPO.
The company will raise Rs 8,000-9,500 crore through the public issue, sources familiar with the matter told Moneycontrol.
This could be the biggest IPO of the financial year 2019-20 if the SBI Cards get a go-ahead from SEBI, sources said, adding the management plans to hit the markets before March 2020.
State Bank of India currently holds a 74 percent stake in the company while private equity giant Carlyle holds the remaining 26 percent. Carlyle had bought this stake in 2017.
In a request for proposal inviting bids from merchant banks and law firms in August 2019, SBI Cards had said, "The company intends to tap capital markets via IPO through Offer for Sale by dilution of up to 14 percent of the issued and paid-up capital.
Sources said after public issue, promoters will dilute further stake in the next three years and will bring down their stake to 75 percent to meet the minimum public shareholding norms set by SEBI.
Moneycontrol was the first to report on the appointment of merchant bankers for this big-bang listing on September 19, 2019.
The company would use fresh issue proceeds towards augmenting capital base to meet future capital requirements.
SBI Cards is the second-largest credit card issuer in India, with an 18 percent market share as of September 30, 2019, according to the RBI.
It is the largest co-brand credit card issuer in India and has partnerships with several major players including Air India, Apollo Hospitals, BPCL, Etihad Guest, Fbb, IRCTC, OLA Money and Yatra, among others.
Kotak Mahindra Capital Company, Axis Capital, DSB Merrill Lynch, HSBC Securities and Capital Markets (India), Nomura Financial Advisory and Securities (India) and SBI Capital Markets are the book running lead managers to the issue.
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