Large Investors Prop Up SBI Cards IPO On Last Day Of Subscription
An employee operates a electronic payment terminal at a musical instruments store in Bengaluru, India. (Photographer: Dhiraj Singh/Bloomberg)

Large Investors Prop Up SBI Cards IPO On Last Day Of Subscription

India’s first initial public offering by a credit card company and the largest float in more than two years was oversubscribed in a market hit by fears of the coronavirus outbreak.

The initial public offering of SBI Cards and Payment Services Ltd. was subscribed 22.45 times as of 7:00 p.m. on Thursday, the last of the four-day share sale. Against an issue size of 10.02 crore shares, the SBI Cards IPO has received bids for 225.09 crore shares, with large investors making the bulk of the purchases.

According to National Stock Exchange data, the portion of shares reserved for retail investors was subscribed 92 percent, while non-institutional investors picked up 23.36 times the shares earmarked for them.

Qualified institutional buyers bought 31.86 times the shares reserved for them. The credit card firm’s employees and State Bank of India shareholders picked up 35 percent and 15.75 times the shares allocated to them, respectively.

The SBI Cards IPO, which aimed to raise up to Rs 10,350 crore at the top of the Rs 750-755 price band, could hardly have come at a worse time. The offering achieved full subscription on Day 3, after failing to do so in the first two days as the coronavirus dampened investor sentiment.

The cards subsidiary of India’s largest lender had raised Rs 2,769 crore by selling 3.66 crore shares to 74 anchor investors on Saturday. The promoter SBI sold 4 percent stake in the SBI Cards IPO, while joint venture partner Carlyle Group offloaded 10 percent holding.

To be sure, this is still a strong showing for the Indian IPO market, which has got off to a slow start so far this year, according to a Bloomberg report. Deals covering the eight companies that have listed so far in 2020 have been tiny, with the largest having raised just $1.6 million.

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