As feared by market experts, listing of the much-awaited SBI Cards and Payment Services Ltd became a victim of the coronavirus pandemic, with the shares listing at a 12.8% discount on exchanges on Monday. However, the stock recouped most of its losses later to trade near its initial public offering (IPO) price of Rs 755.
At 11:27 am, SBI Cards shares were trading at Rs 741.70 apiece on BSE, down nearly 1.8% from the issue price, after opening at Rs 658. The equity shares were admitted to dealings on the exchange in the list of 'B' group securities on BSE.
The Sensex and Nifty were also trading nearly 5% lower on Monday as fears over the coronavirus outbreak deepened. The domestic equity indices have been in the correction mode for the last three weeks and are down almost 20% from their recent highs
A weak listing was expected for SBI Cards as the stock’s grey market premium had fallen sharply -- from a premium of Rs 350-380 seen before the IPO opened on 2 March to a discount of Rs 50 seen last week.
The Rs 10,340-crore SBI Cards IPO was oversubscribed 26.54 times during 2-5 March after most brokerages advised investors to put in money in the issue. The portion reserved for qualified institutional buyers (QIBs) saw a massive subscription of over 57 times, while that reserved for high net worth individuals (HNIs) was subscribed 45 times. The retail portion was subscribed 2.5 times.
The SBI Cards IPO comprised a fresh equity issuance of Rs 500 crore and an offer for sale (OFS) of up to 130,526,798 equity shares. This included sale of up to 37,293,371 shares by SBI and up to 93,233,427 shares by Carlyle Group. The shareholding of SBI and CA Rover in SBI Card reduced to around 70% and 16%, respectively, after the IPO.
SBI Cards is the second-largest credit card issuer in the country with 9.46 million credit cards and 18% share of the Indian credit card market as of 30 September 2019. Meanwhile, HDFC Bank has the largest credit card business in the country with 13.3 million cards issued, while ICICI Bank stood third with 7.9 million credit cards, as of 30 September 2019, according to data from the Reserve Bank of India.
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