They are the second-largest credit card issuer in India, with a 17.6% and 18.0% market share of the Indian credit card market in terms of the number of credit cards outstanding as of March 31, 2019 and September 30, 2019, respectively.
And a 17.1% and 17.9% market share of the Indian credit card market in terms of total credit card spends in fiscal 2019 and in the six months ended September 30, 2019, respectively, according to the RBI.
They have established a proven track record of consistently generating profits over the past three fiscal years. The total income increased from Rs.34,710.38 million in fiscal 2017 to Rs.72,868.34 million in fiscal 2019 at a CAGR of 44.9% and their revenues from operations have increased from Rs.33,462.03 million in fiscal 2017 to Rs.69,991.11 million in fiscal 2019 at a CAGR of 44.6%.
Their net profit increased from Rs.3,728.59 million in fiscal 2017 to Rs.8,627.19 million in fiscal 2019 at a CAGR of 52.1%. The ROAE has remained stable at 28.5% in fiscal 2017 and 28.4% in fiscal 2019, while their ROAA increased from 4.0% in fiscal 2017 to 4.8% in fiscal 2019.
From FY 2015-16 to FY 2018-2019, as per the Restated Financial Statements
The Promoters of this company are STATE BANK OF INDIA. The lead manager to the issue are Kotak Mahindra Capital Company Limited, Axis Capital Limited, DSP Merrill Lynch Limited, HSBC Securities and Capital Markets (India) Private Limited, SBI Capital Markets Limited*, Nomura Financial Advisory and Securities (India) Private Limited and the Registrar to this issue is Link Intime India Private Limited.
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SBI Cards IPO Dates / Launch Date
The opening and the closing date of SBI Cards IPO is not known yet.
SBI Cards IPO Price Band / Cash Price
The face value of each share is Rs.10,and the cash price of the IPO is not yet disclosed.
SBI Cards IPO Size / Share Offering
Initial public offering of Upto X Equity Shares of Face Value of Rs.10/- each for Cash at a Price of Rs.[●] Per Equity Share (Including a Share Premium of Rs.[●] per Equity Share) aggregating to Rs.[●] Millions.
SBI Cards Limited – Company Overview
SBI Cards & Payments Services Ltd. which was previously known as SBI Cards and Payment Services Private Limited. The company is coming up with his initial public offering soon. SBI Cards and Payment Services Limited is one of the largest credit card issuer in India. It is not starting SBI card pay a payment feature based on HCE Technology (Host Card Emulation).
SBI Cards Technology and Database
Their business is technology-driven and underpinned by their data analytics capabilities, which cut across all aspects of their operations. Their core technology systems are scalable, modern and sophisticated, with considerable capacity to support their future growth.
They possess a large database of cardholder demographic and socio-economic data (such as their cardholders’ purchase patterns, behaviors and payment histories) derived from the numerous transactions carried out by millions of cardholders each year, which they analyze to generate underwriting scorecards, proactively mitigate risks, and reduce losses and delinquencies.
SBI Cards Revenue Model
They have a diversified revenue model whereby they generate both non-interest income (primarily comprised of feebased income such as interchange fees, late fees and annual fees, among others) as well as interest income on their credit card receivables. The share of their revenue from operations that they derive from non-interest income has steadily increased over the past three fiscal years, from 43.6% in fiscal 2017 to 48.9% in fiscal 2019.
SBI Cards Networking & Multiple Channels
They deploy a sales force of 33,086 outsourced sales personnel as of September 30, 2019 operating out of 133 Indian cities and which engages prospective customers through multiple channels, including physical points of sale in bank branches, retail stores, malls, fuel stations, railway stations, airports, corporate parks and offices, as well as through tele-sales, online channels, email, SMS marketing and mobile applications.
In addition, their partnership with SBI provides them with access to SBI’s extensive network of 22,007 branches across India, which enables them to market their credit cards to SBI’s vast customer base of 436.4 million customers as of March 31, 2019.
Business strategies of SBI Cards:
- Continued expansion of portfolio
- Enhance productivity and operational efficiencies
- Optimizing the value of their asset portfolio through an efficient capital structure
SBI Cards Limited – Financial Statements
A quick look into the past financial performance of the company to understand its performance of business and evaluate the growth prospectus:
SBI Cards IPO Financial Summary
On the basis of Standalone statement:
|Amount (in INR & million)|
|Profit After Tax||7,258.82||3,766.10||8,627.19||6,011.43||3,728.59|
|EBITDA||1 7,037.82||1 0,826.19||2 4,299.10||16,553.49||11,048.47|
Earnings per Equity Share (in Rs.million)
|Basic & Diluted||7.79||4.20||9.43||7.40||4.75|
From the above statements, one could find that the SBI Cards and Payment Services Limited may perform well.
SBI Cards IPO – Promoters
The Promoters of this IPO are:
- State Bank of India
List of Related Parties (Key Managerial Personnel)
- Mr. Hardayal Prasad, MD and CEO
- Mr. Vijay Jasuja, CEO
SBI CARDS IPO – Details of shareholding:
The State Bank of India holds around 74% of equity shares and CA Rover Holdings holds around 26% equity share.
Interest in promotion of the Company
Their Directors have no interest in the promotion or formation of their Company as on the date of this Draft Red Herring Prospectus. However, their Promoter, SBI has nominated four nominee Directors on their Board, pursuant to the terms of the SHA.
Their Directors have no interest in any property acquired or proposed to be acquired by their Company.
Interest in Intellectual Rights of the Company
Promoters has not shown any interest in acquiring the intellectual rights of the company.
SBI Cards IPO Offer Details or Issue Details
|Particulars||No. Of Equity Shares|
|Equity Shares Offered||Up to [●] Equity Share aggregating up to Rs.million|
|Fresh Issue||Up to [●]Equity Share aggregating up to Rs.5,000 million|
|Offer for Sale||Up to 130,526,798 Equity Shares aggregating up to Rs.million by the Promoter Selling Shareholder|
|QIB Portion||Upto Equity Share of face value of Rs.10/-|
|Anchor Investor Portion||Up to [●] Equity Shares|
|Balance available for allocation to QIBs other than Anchor Investors (assuming Anchor Investor Portion is fully subscribed||[●] Equity Share|
|Available for allocation to Mutual Funds only (5%of the QIB Portion (excluding the Anchor Investor Portion)||[●] Equity Shares|
|Balance of QIB Portion for all QIBs including Mutual Fund|
|Non- Institutional Portion||Not more than [●] Equity Shares|
|Retail Portion||Not more than [●] Equity Share|
|Equity Shares outstanding prior to the Issue||932,334,278 Equity Shares|
|Equity Shares outstanding after the Issue||[●] Equity Shares|
SBI Cards IPO Issue Object
These are the IPO Issue Objects of the company:
- The object of the Offer for Sale is to allow the Selling Shareholders to sell an aggregate of up to [●] Equity Shares held by them. Their Company will not receive any proceeds from the Offer for Sale.
SBI Cards IPO – Basis of the Offer Price
The issue price is determined by the company in consultation with the Lead manager on the basis of the following qualitative and quantitative factors.
Qualitative factors are:
- Second largest credit card issuer in India with deep industry expertise and a demonstrated track record of
growth and profitability
- Diversified customer acquisition capabilities
- Supported by a strong brand and pre-eminent promoter
- Diversified portfolio of credit card offerings
- Advanced risk management and data analytics capabilities
- Modern and scalable technology infrastructure
- Highly experienced and professional management team
The relevant quantitative factors are:
|Basic & Diluted EPS||RONW in %||NAV (Rs.)|
- Price to Earnings (P/E) ratio in relation to Price band of Rs.[●] to Rs.[●] per Equity Share
Competitive Peers of SBI Cards and Payment Services Limited
Below are listed companies in India that engage in a business similar to that of their Company.
SBI Cards IPO Lead Managers to the Issue
|Kotak Mahindra Capital Company Limited,Axis Capital Limited,DSP Merrill Lynch Limited,HSBC Securities and Capital Markets (India) Private Limited,SBI Capital Markets Limited*,Nomura Financial Advisory and Securities (India) Private Limited|
SBI Cards IPO Registrar to offer
|Registrar to the Offer|
|Link Intime India Private Limited|
C-101, 1st Floor, 247 Park
Lal Bahadur Shastri Marg, Vikhroli (West)
Mumbai – 400 083
Telephone: +91 22 4918 6200
Email: [email protected]
Contact Person: Shanti Goplakrishnan
SEBI Registration No: INR000004058
- Statutory Auditor – S. Ramanand Aiyar & Co,
- Legal Counsel to the Company – Shardul Amarchand Mangaldas & Co
- Bankers to the Company – NA
SBI Cards IPO Review by Top 10 Stock Brokers
|Top Stock Brokers Review||Company Reputation||Competitive Edge||Financial Statement||Popularity Index||Promoters Reputation|
SBI Cards IPO Grey Market Premium
The SBI Cards IPO Grey Market Premium price is Rs.185-190 (Only buyers, No Sellers), and the Subject to Sauda is Rs.0. Application for Rs. 600 confirmed.