The State Bank of India (SBI) is planning a secondary stake sale of SBI Cards Payment and Services (SBI Cards), its credit card joint venture with private equity firm Carlyle.
The bank presently holds 74 percent stake of SBI Cards and hopes to raise Rs 5,000-6,000 crore from a partial stake sale. Once through, the bank’s stake is expected to drop by 14 percent, reports the Economic Times.
The proposed initial public offering (IPO) has been pegged at Rs 8,000 crore, and SBI is in talks with multiple merchant bankers for the same by Q4FY20, the report added.
Moneycontrol could not independently verify the report.
The paper quoted a source as saying, “This is going to be primarily a secondary sale of shares from the existing investors — SBI and Carlyle Group. SBI Cards is expected to raise about Rs 500-1,000 crore.”
The issue size, however, would depend on Carlyle’s participation in the sale. If it goes through, SBI Cards would be the first pure-play credit card company in India and would be valued between Rs 35,000-40,000 crore, the report added.
SBI and SBI Cards did not respond to ET’s queries while Carlyle was unreachable.
HDFC Bank has the maximum number of credit card customers with 12.7 million (1.27 crore), while SBI Cards comes in second with 8.7 million (87 lakh), the report added.
News Source: Moneycontrol