SBI Cards m-cap inches closer to half of entire SBI’s market cap; share price hits new 52-week high again

SBI Cards and Payment Services share price hit a new 52-week high of Rs 918.60 apiece, gaining nearly 3 per cent on BSE in an otherwise weak trade on Thursday. The stock price has risen for the second consecutive day. With this, SBI Cards market cap is now close to half of State Bank of India’s (SBI) market cap. SBI Cards’ market capitalisation stood at Rs 86,205.43 crore while that of SBI at Rs 1.75 lakh crore. SBI Cards share price has surpassed the previous high of Rs 895 apiece touched yesterday. With today’s gain in share price, SBI Cards has rallied 85.48 per cent from May low of Rs 495.25.

In just 7 days, SBI Cards and Payment Services share price has rallied over 9 per cent. While it jumped nearly 7 per cent from yesterday’s opening price of Rs 860 apiece on BSE. “We have a positive view owing to attractive industry prospects like government’s push for a digitized and cashless India, a shift in spending pattern bending towards higher discretionary spending, lower penetration (3-4 out of every 100 people using credit cards to transact),” said Jaikishan Parmar, Senior Equity Research Analyst at Angel Broking Ltd. Along with this, Parmar said that SBI’s strong parentage and diversified portfolio are backing revenue growth. “SBI Cards is well placed to capture the current trend of online payment and spending,” he added.

The credit card spend for August has crossed that of March spending. According to the RBI data, banks reported Rs 50,311 crore worth in August, compared with Rs 50,574 crore in March. However, in August 2019 it stood at Rs 60,011 crore. Analysts believe that credit card spend is coming back to the pre-covid level which has created a fresh positive movement in SBI Cards and Payment Services stock price.

According to the BSE data about shareholding patterns, foreign portfolio investors (FPIs) increased their stake in the company to 5.93 per cent in July-September quarter from 4.23 per cent at the end of June 2020. FPIs held 4.07 per cent stake in SBI Cards at the end of March 2020 quarter. While mutual funds reduced their stake to 2.46 per cent in the second quarter from 2.58 per cent in the first quarter. Similarly, alternate investment funds too reduced their equity holding to 0.33 per cent from 0.44 per cent at the end of June quarter. On the other hand, insurance companies hiked their stake to 0.41 in the September quarter from 0.07 per cent in June.