SBI’s Credit Card Division Seeks To Raise $1.1B With IPO

SBI Card & Payments Services Ltd, the credit card subsidiary of the State Bank of India (SBI), seeks to raise about 80 billion Indian rupees ($1.12 billion) with an initial public offering (IPO) this year, Deal Street Asia reported on Thursday (Aug. 29).

“Roughly about an 8 percent stake will be divested, and after seeing the valuations and the inputs we are getting, it would translate to 80 billion rupees,” a source told Deal Street Asia.

Banks have already been chosen to handle the IPO process, which will likely happen in the last quarter of 2019. Valuation is anticipated to be about one trillion rupees ($14 billion).

SBI owns 74 percent of SBI Card; 26 percent of the company is owned by the Carlyle Group, a U.S. private equity firm.

India’s card market has 49.6 million credit cards and 836 million debit cards in circulation. SBI Card is India’s second-largest credit card issuer, with 8.8 million outstanding cards as of June 30.

SBI Card will be SBI’s second subsidiary to be listed. In 2017, the bank’s life insurance business SBI Life Insurance was listed in an 84 billion rupees IPO, the largest listing after Coal India’s in 2010.

India’s ride-hailing company Ola partnered with SBI Card earlier this year to launch a co-branded credit card, allowing the company to expand its customer base.

SBI recently collaborated with FSS (Financial Software and Systems) to bolster the “One Nation One Card” program. The effort seeks to work toward tap-and-pay card issuance along with a common mobility card for commuting and transportation transactions. The platform from FSS is said to handle settlement, transaction clearing and card issuance.

“We are excited to build on our leadership position and bring innovative digital payments experiences to consumers through our partnership with the State Bank of India,” said FSS President for Retail Payments Suresh Rajagopalan.