IPO Details
Here is snap shot of the IPO
- Issue Opening – March 2nd
- Issue Closing – March 5th
- Price Band – INR 750 to INR 755
- Minimum Order Size – 19 shares
- Minimum Investment – (19 * 750) = INR 14,250
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Business Overview
SBI Cards is in Financial Sector. It deals with Credit Cards. In fact it is second largest credit card issuer in India. So Company has leading presence in Credit Card market.
It is backed by one of the largest Banks of India SBI. SBI holds 74% while Carlyle holds 26% in SBI Card.Below are some of the facts about the Company
- In year 2019 it entered into 9 million card club
- It entered 1 million card club in year 2002.
- It crossed 7 million customer base in year 2018
- So in last one year the customer base grew by 2 million
It offers wide range of Credit Cards to suit purpose of most Customers. Different credit card categories are
- Rewards Points
- Lounge Access
- Fuel Surcharge Waiver
- Fraud Liability Cover
- Concierge Service
- Travel Benefits
It has tie up with different Companies like IRCTC, BPCL, Yatra, TATA, Air India and Apollo. This ensures each Customer has a credit card for its usage.
Financial Snapshot
Below are Financial Snapshot of the Company in million INR
- Year 2019
- Total Revenue 72868(excluding other incomes)
- Profit after tax 8627
The company’s total income increased at a CAGR of 44.9% and the revenues from operations have increased at a CAGR of 44.6% between fiscal 2017 to 2019. The net profit grew at a CAGR of 52.1% during the period.
Currently it enjoys the market share of close to 18%. The market share is in this range for quite sometime.
IPO Subscription Status
Below is IPO subscription status as of now. Note IPO subscription status is important input in deciding whether you need to invest in the IPO or not as discussed in IPO investment tips.
- QIB – 57.18 times
- NII – 40.63 times
- RII – 2.48 times
- Employee – 4.74 times
- Others – 22.69 times
- Total Subscription is 25.34 times
Below is meaning of the Key terms used above
- QIB is (Institutes or Mutual Funds like HDFC AMC etc)
- NII is (People bidding for more than 2 lakhs in IPO application)
- RII is (People bidding for less than 2 lakhs)
- Employee and Others are Reserved Quota Investors.
My Opinion
SBI Cards is proxy play into growing Economy of India and thickening middle class. It is play of Consumer theme as well. Credit cards are loved by new generation. It is widely used by travel enthusiast, shoppers and working professional.
You can clearly see increasing adoption for Credit cards with growth data for SBI Cards. In 17 year period it has grown 9 times which is excellent by any standard. The market is far from saturate due to the fact that India is young country and has large portion of working professionals.
Due to these reasons the IPO application has seen good traction from different players. The Company has posted good numbers over the years as well. So from it is good Company to go for IPO investment.
The word of caution is current market situation. As of this writing market is negatively impacted by Corona Virus impact and is trading close to 11 thousand. The index and stocks have suffered a great deal.
The negative market sentiment can impact the IPO listing gains but I am predicting decent listing gains for this IPO. This is good IPO do invest in looking at subscription data and the market condition may improve in next two weeks.
Note I am not SEBI registered analyst and researcher. You should take your own investment decision. Above post is for my own reference for IPO evaluation.