Street signs: SBI Cards IPO, ESG funds get stewardship push, and more

Traders take SBI route for Card IPO 

Savvy traders plan to apply for SBI Cards and Payment Services shares in the “shareholder” quota of the IPO. Brokers say many wanting get to their hands on the country’s second-largest credit card company have bought shares of parent State Bank of India (SBI) from the secondary market in recent weeks. About 13 million shares (worth over Rs 900 crore) are reserved for SBI shareholders in the IPO. Typically, the retail book sees higher subscription than the shareholder book and, therefore, the chances of getting allotment through the latter are higher. The last date to be eligible to apply in the shareholder category ended last week. Grey market operators say shares of SBI Cards are commanding a premium of more than 30 per cent.  

Samie Modak

ESG funds get stewardship push
 

The stewardship code laid down by the Securities and Exchange Board of India (Sebi) can give a fillip to ESG funds, which invest in companies based on their environmental, social and governance (ESG) standards. "The stewardship code has made it mandatory for mutual funds (MF) to assess ESG risks in investee companies," said the chief investment officer of a fund house. Fund houses need to put a framework in place to track ESG standards followed by companies. “Gradually, fund houses will be able to build more robust skill-sets to manage ESG funds," he added. While Axis MF has already launched an ESG fund, Birla Sun Life MF has filed for one with Sebi. 

Jash Kriplani

Reining in Nifty volatility  
 

The frontline Nifty index is expected to shed some volatility after the latest reshuffle. In September, Nestle India replaced Indiabulls Housing Finance in the 50-share index and next month, Shree Cement will come in place of YES Bank. Shares of both Indiabulls Housing and YES Bank have been volatile on the bourses, while Nestle India and Shree Cement aren’t. This is not just because of their stable businesses but also on account of high-denomination of their stock price. Shares of Nestle India currently quote around Rs 16,500, while those of Shree Cement are at Rs 24,400. In absolute terms, the two stocks are the most expensive on a per share basis in the Nifty index, which is widely tracked by exchange traded funds. 

Samie Modak