SBI Cards’ Shares Drop After Six Large Deals
Shares of SBI Cards and Payment Services Ltd. dropped after multiple large deals.
The subsidiary of India’s largest lender, State Bank of India, saw 4.57 crore shares worth Rs 4,557 crore exchange hands in six large deals, according to Bloomberg data. The transactions took place between Rs 990.3 and Rs 997.2 apiece.
CA Rover Holdings, one of the largest shareholders, planned to sell 3.8 crore shares of the nation’s only pure-play credit card issuer, the terms of the deal accessed by Bloomberg News showed. The shares were to be sold between Rs 981.8 and Rs 1,022.1 apiece. The price range represented a discount of as much as 4% to Tuesday’s closing.
The terms also suggested that the seller will be subjected to a 90-day lock-up period.
As of December, CA Rover Holdings owned a 15.8% stake in SBI Cards.
Morgan Stanley, while initiating coverage on SBI Cards on March 12, had termed SBI Cards as a pure-play on India’s unsecured consumer finance opportunity. “The payments/fintech wrapper makes for an intriguing narrative,” the global financial services provider said in a note. “Its parentage mitigates tail risks and provides a large growth base that should support its steep valuation.”
Shares of SBI Cards fell as much as 4.4% as of 10:20 a.m. to Rs 977.2 apiece — the lowest in nearly two months. Of the 11 analysts tracking the company, eight have a ‘buy’ rating and three suggest a ‘hold’, according to Bloomberg data. The average 12-month consensus price targets implies an upside of 16.6%.