Should you apply to the IPO of SBI Cards?

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.

Also, check out the coverage on these news sites:

  1. Livemint - SBI Cards IPO rides on millennials’ king size life
  2. CNBCTV18 - Here’s how SBI Cards IPO will impact the valuation of its parent SBI
  3. Free Press Journal - SBI Cards IPO: All that glitters is not gold!

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