SBI Cards and Payment Services Ltd

... NSE/BSE

IPO Size

`10354.77 Cr

Price Band

`750-755 Per Share

Minimum Lot Size

19 Share

Face Value

`10 Per Share

Employee Discount

`75 Per Share

Retail Allocation

35%

Issue Open Date

02 Mar 2020

Issue Close Date

05 Mar 2020

Listing Date

16 Mar 2020

About the Company:

SBI Cards and Payment Services Private Limited was incorporated in 15th May 1998; headquarter in New Delhi. It is second-largest credit card issuer in India, with a 17.6% and 18% 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

Outstanding Litigation:

 No.

 1 - Company

 2 - Directors

3 - Promoter

Entity Name

By the
company

Against
Company

By the
Directors

Against
Directors

By the
Promoter

Against
Promoter

Criminal
Proceedings

33,075

-

-

2

88

1

Tax
Proceedings

 -

15

-

 

- 

Over 521

Regulatory
Proceedings

- 

3

-

1

- 

1

Civil
Litigation

3

17

-

 

2

19

Amt. (in
millions)

950.99

4,787.39

-

25

4,03,374.90

6,45,197.90

Financial Statement:
KEY FINANCIALS in cr

 

Total Revenue

Total Expenses

Net Worth

PAT

30-Dec-19

72,401.56

56,214.83

48,288.22

11,612.07

31-Mar-19

72,868.35

59,552.34

36,532.37

8,627.22

31-Mar-18

24,245.75

44,508.48

24,245.75

6,011.42

31-Mar-17

34,710.38

28,994.14

14,488.19

3,728.61

CAGR (%)

45%

43%

59%

52%

FY20E

50292.03

41553.21

23006.26

5671.64

FY21E

72868.35

59552.34

36532.37

8627.22

*Note: CAGR is calculated from 31st Mar 17 to 31st Mar 19 & 31st Mar'19 is taken as base year

 

On financial performance front for the last three fiscals, SBI Cards has posted total revenue/net profits of Rs 372.8 cr. / Rs 3,471 cr. (FY17), Rs 601.14 cr. / Rs 2,424.5 cr. (FY18) and Rs 862 cr. / Rs 7,286 cr. (FY19). The company has posted CAGR of 45% in revenue and 52% in net profits.


As of September 30, 2019, the company has a sales force of 33,086 outsourced sales personnel operating out of 133 Indian cities.

Recommendation

As per Lokesh Sethia, SEBI Registered, Research Analyst, recommendation is to 'SUBSCRIBE'. Being a monopoly player investors are getting more attracted towards it. Additionally, company's robust financial performance in last three years and credit card spends have registered a robust growth, growing at a CAGR of 32% from fiscal 2015 to fiscal 2019 and is expected to grow further 25% per year. According to draft prospectus, SBI Cards and Payment Services has 18% market share next to HDFC Cards which holds 27% market share. At the higher price band of Rs.775 per share, the company valued at a P/E multiple of 20x, seems a healthy firm and the book running lead managers to the SBI Card IPO offer are Kotak Mahindra Capital Company, SBI Capital Markets, DSP Merrill Lynch, Axis Capital, HSBC Securities and Capital Markets, and Nomura Financial Advisory and Securities.

Promoter of the Company

The Promoter of the Company is SBI.

Peer Comparison

There are no listed companies in India which are engaged in the same line of business

Objectives of the Issue

Offer for Sale

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. The company will not receive any proceeds from the Offer for Sale.Offer for Sale Size is of Rs 9,854.77 crore

Fresh Issue

The net proceeds of the Fresh Issue, i.e. Gross proceeds of the Fresh Issue less the Offer Expenses apportioned to the Company ("Net Proceeds") are proposed to be utilized for augmenting the capital base to meet company's future capital requirements. Fresh issue Size is of Rs 500 crore