Carlyle and SBI to make partial exits from SBI Cards and Payment via IPO.

The US private equity giant, The Carlyle Group, and State Bank of India (SBI) will make partial exits from SBI Cards and Payment Services Ltd. The credit-card issuing company has filed its draft prospectus with the Securities and Exchange Board of India (SEBI) for an IPO. SBI Cards is the second-largest credit-card issuer in India in terms of the number of credit cards outstanding and the amount spent with 9.46 million credit cards outstanding, as on September 30, 2019. HDFC Bank holds the leadership in terms of the number of cards issued.

The public offering comprises a fresh sale of shares worth Rs. 500 crores besides a secondary market sale of 130.52 million shares by Carlyle and SBI. The PE giant has offered to sell 93.23 million shares, or a little over one-third of its 26 per cent stake.The total IPO size is estimated at Rs. 9,000 crores and the offering may result in a 14.5-15 per cent stake dilution. Carlyle’s 26 per cent stake may dilute to an estimated 16 per cent, depending on the price of the IPO and the number of fresh shares issued through the offering while SBI’s stake will dilute from 74 per cent to roughly 69.5 per cent.

Kotak Mahindra Capital Company, Axis Capital, DSP Merrill Lynch (a Bank of America subsidiary that operates in India), HSBC Securities and Capital Markets (India), Nomura Financial Advisory and Securities (India), and SBI Capital Markets are the merchant banking syndicate arranging and managing the share sale.


SBI Cards will become the fifth group company under the SBI Group to go public after the listing of its parent and another group entity, SBI Life Insurance Co. Ltd. SBI was considering a plan to dilute its stake in its credit card subsidiary through an IPO and the bank was seeking the Reserve Bank of India (RBI)’s approval to sell its stake.