SBI Eyes Rs 6,000 Crore from Sale of Stake in Credit Card Venture

Updated on: 14 Dec 2021 // 1 min read // #mmm news
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The State Bank of India is considering sale of a minor stake of SBI Cards Payment and Services (commonly known as SBI Cards) and raise Rs 5,000-6,000 crore as per the news published in Economics Times.

The SBI Cards is a credit card joint venture of the largest public sector bank of India with private equity firm Carlyle. Currently, SBI holds 74 percent stake of SBI Cards, and it is expected that the bank is set to drop 14 percent, as a result of the deal.

The news reports also said that the proposed initial public offering has been pegged at Rs 8,000 crore. The bank is also in talks with multiple merchant bankers by Q4 of Financial Year 2020 for the same.

As per the report, this deal is going to be majorly a secondary sale of shares of the existing investors, i.e., SBI and Carlyle Group. After the deal, SBI Cards Venture is expected to raise around Rs 500-1,000 crore.

However, the final numbers would depend once Carlyle’s participation is defined. Owing to this deal, SBI Cards would become the first pure-play credit card company in India. The new valuation would be anywhere between Rs 35,000-40,000 crore.

Currently, SBI Cards is the second-largest Credit Card issuer in the country with a base of 8.7 million (87 Lakh); while HDFC Bank is at the lead place. The HDFC Bank has a robust base of 12.7 million (1.27 crore) users.