SBI card hit to secondary market amid weak market sentiments

Amid chaos on the D-street, on Monday, SBI Card & Payment Services, the country’s second-largest credit card issuer hit to the secondary market at a discount of almost 13 per cent to issue price of Rs 755. The current market sentiments have been dampened by the outbreak of Covid-19 as it has pushed the economic activity across the globe to a standstill. Despite this dampen sentiments, the IPO got oversubscribed by almost 26 times while, retail category was subscribed by almost 2.5 times. Notably, qualified institutional buyers category was subscribed 57.2 times.

However, post listing at discount, the stock of SBI cards recovered later touched an intra-day high of Rs 755. This weak listing might adversely impact to the high net worth investors because to invest for this IPO, they had borrowed funds at 13 to 15 per cent an interest rate.

The IPO majorly consisted of an offer for sale of 13.05 crore shares by CA Rover Holdings (Carlyle) and SBI & fresh issue of Rs 500 crore to be used for augmenting the capital base.

At 11.31 am, the stock was trading at Rs 742, up by 12.7 per cent from open price but down by almost 1.8 per cent from issue price of Rs 755.