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.
Shares of State Bank of India gained more than 2 percent on November 27 after its subsidiary SBI Cards and Payment Services filed draft red herring prospectus with capital market regulator SEBI.
The stock surged 22 percent in last one month. Today it closed at Rs 343.60, up Rs 8.15, or 2.43 percent on the BSE.
The public issue of country's second-largest credit card provider 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.
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 gets 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.
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.