Should you apply to the IPO of SBI Cards?

The SBI Cards IPO is launching on March 2nd. Click here for the process to apply.

The SBI Cards IPO has been getting a lot of media coverage recently. And everyone is trying to decipher the DRHP filed with SEBI. It is the second largest issuer of credit cards in India after HDFC.

Bloomberg covered the SBI cards IPO and highlighted some interesting pieces of information on the payments industry. Only half of the revenue for a credit card company like SBI cards comes from
interest on credit card loans. The other half comes from card fees and merchant charges :slight_smile:

Non-interest income comprised 47.2 percent and 49.3 percent of the company’s revenue from operations in the six months ended Sept. 30, 2018 and 2019, respectively.

The Carlyle Group had made a private equity investment in SBI cards in December, 2017. Check out the recent financial figures of SBI Cards:

As per the draft red herring prospectus filed on Wednesday, SBI Cards reported a net profit of Rs 862.7 crore in financial year 2018-19 compared to Rs 601.1 crore in FY18 and Rs 372.8 crore in FY17. Its total revenue from operations stood at Rs 6,999 crore in FY19, Rs 5,187 crore in FY18 and Rs 3,346 crore in FY17.

In the first half of FY20, the company reported a net profit of Rs 725.8 crore and a revenue of Rs 4,677 crore.

Here is the entire Bloomberg article.

Indicative Time Table

Action Date
Basis of allotment 11-3-2020
Refunds/Unblocking of ASBA 12-3-2020
Credit of share 13-3-2020
Listing 16-3-2020

Issue Summary

Category Allocation No of Shares Amount at upper price band (Rs. crores)
QIB (including Anchor): 50 % 6,11,15,982 4,614.26/-
NIB: 15 % 1,83,34,795 1,384.28/-
Retail: 35 % 4,27,81,188 3,229.98/-
Eligible Employee: - 18,64,669 126.80/-
SBI Shareholders: - 1,30,52,680 985.48/-
Total 100% 13,71,49,314 10,340.79/-
5 Likes

i have a good feeling about SBI cards IPO. mainly, after such tremendous results by CSB and oversub of ujjivan.

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Pls reply…

You will be able to apply for an IPO in only one category through your Zerodha account. However, you can use bank ASBA with your demat account details to apply in a separate category. Your applications will be considered separately for eligibility.

The likelihood of receiving allotment is higher since you are applying twice. Also, the probability of allotment depends on the number of times subscription received in a category. However, please note that your applications are liable to get rejected if you apply more than once in the same category even if you make your applications through different intermediaries.

3 Likes

Is it possible to apply on retail category through asba through Zerodha and in shareholders category with other brokers with same pan. Will it increase probability of allotment.

Yes, you’ll be able to apply through one broker under the retail category and through another under the shareholder category in your name.

2 Likes

@MohitBangalore I want to apply for the SBI Cards IPO for the Same PAN in Retail and Shareholder Category.

  1. Can I apply for both the category from Zerodha itself or I need second broker to apply for the second category?

  2. Can I still buy SBI Shares to be eligible for the Shareholder Category?

Thanks.

  1. You can apply in any one category through Zerodha.
  2. The ROC filing of the RHP should happen today. I don’t think you can buy the shares today to be eligible. The record date for this should be announced by the merchant bankers soon.
1 Like

@MohitBangalore If I wish to apply for the another category, for that I need to apply through different platform or broker?

Re-Explanation: I wish to apply for both Retail and Shareholder Category to increase the probability of allotment. I wish to take advantage of both categories.

So can we use Zerodha for both the category at the same time for same PAN or do I need second broker to apply for the second category?

Please confirm.

Is there any limit for the number of shares to be purchased to be eligible for shareholders category.

You can only apply in one category via Zerodha. If you want to apply in both retail as well as shareholder category you need to do it with two broker (one for retail and one for shareholder).

You will be only be considered a shareholder if you have at least 1 share in your name before the date of filing of RHP (most likely today, so if you haven’t bought the share this monday, its already too late).

The PAN, Name and other details should match in both your broker accounts, otherwise your application will get rejected and no shares will be allotted to you. Hope this helps.

1 Like

Hi Mohit, have a question regarding shareholder category. RHP says if someone holds shares as of 18th Feb they are eligible to apply under shareholder category. I bought SBI shares on 17th Feb (Mon) and they were credited to my demat account on 19th Feb(Wed). Am I eligible to apply under shareholder category?

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No, in this case the registrar will not consider you as a shareholder as on the record date. The shares have to be present in your demat account as on Feb 18th.

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Well that sucks!
Thanks for the info, Mohit

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If you could mention a reliable broker apart from Zerodha which is good for this purpose? I don’t want to mess a lot.

Thanks.

You could also use your bank’s NetBanking portal to apply using bank asba if your bank supports it. You will need to fill in your Zerodha demat account details on the bank’s portal. You can find this on console.zerodha.com in the profile>demat section.

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So you mean : i can apply in both the category i.e retail and shareholder with zerodha . one : with the zerodha directly and the other : with the ASBA !
am i right ?

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Yes, Sir

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So do you mean that:

I can do Zerodha to Zerodha for Shareholding Category.

AND

Any Bank ASBA to Zerodha’s DEMAT?

Also, Please check the GREEN BOX Marked on this image.

How am I suppose to invest now if they have restricted the Retail Investor to only use UPI?

ASBA is not supported.

Thanks.

1 Like