SBI Cards and Payment Services IPO opens Monday: Price band, lot size, date, all you need to know

SBI Cards is set to become the fifth-largest IPO in India after Coal India, Reliance Power, General Insurance Corporation of India (GIC Re) and ONGC

SBI Cards and Payment Services, a subsidiary of State Bank of India (SBI), has raised Rs 2,769 crore from anchor investors. These are institutional investors that subscribe to the shares in an initial public offering (IPO) ahead of its opening. As per the regulatory filing, 12 mutual funds among the 74 anchor investors have been allotted a total of 36.7 million shares at the offer’s upper price band of Rs 755 apiece. The company will issue fresh equity shares worth Rs 500 crore. It is set to become the fifth-largest IPO in India after Coal India, Reliance Power, General Insurance Corporation of India (GIC Re) and ONGC. Here’s all you need to know-

Price band– SBI announced that the price band of the IPO of SBI Cards and Payment Services has been fixed at Rs 750-755 per share. “State Bank of India has been informed by SBI Cards that the IPO Committee of SBI Cards in consultation with the Book Running Lead Managers have finalised the price band to range between Rs 750/- to Rs 755 per equity share,” the bank said in a regulatory filing.

Bid lot size– The lot size has been fixed at 19 equity shares and in multiples thereafter. This means that the bids can be made for a minimum of 19 equity shares and in multiples thereof. SBI employees will be eligible for a discount on the IPO of Rs 75 per share.

IPO to open for four days- SBI Cards IPO, the first from a pure-play credit card company, will hit the primary market with a Rs 10,350 crore initial public offering from March 2 to 5, i.e for four days. Under normal circumstances, IPOs are open for subscription for three days. The issue will be open for all bidders – QIBs, NIBs, and Retail investors (including SBI shareholders and employees) for the first three days. However, the fourth day will be exclusively for Retail investors only.

Listing date- SBI Cards will be listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) both on or around March 16, according to the red herring prospectus.

SBI Cards offer details- As per draft paper for the IPO, SBI Cards would offer up to 130,526,798 equity shares through an offer-for-sale route. This would include up to 37,293,371 shares by SBI and 93,233,427 scrips on offer by Carlyle Group.

Book-running lead managers- The book-running lead managers for the SBI Cards IPO are Kotak Mahindra Capital Company, SBI Capital Markets, DSP Merrill Lynch, Axis Capital, HSBC Securities and Capital Markets, and Nomura Financial Advisory and Securities.

Anchor investors- According to a PTI report, the Singapore government, Monetary Authority of Singapore, HDFC Mutual Fund, Government Pension Fund Global and Birla Mutual Fund, are among the anchor investors. SBI holds 76 per cent in SBI Cards and the rest of the stake is held by Carlyle Group.

Objective of IPO- As per the draft papers, the proceeds from the IPO will be utilised to augment the firm’s capital base to meet future capital requirement. “The net proceeds are proposed to be utilised for augmenting our Company’s capital base which will be utilised towards company’s business and growth including towards extending credit to our customers, meeting our operating expenditure and future working capital requirements which are expected to arise out of the growth of our business,” it said.