Street signs: The SBI Cards IPO math, ETF overhang for YES Bank, and more

Grey market premiums have dropped to 10% after last week's market fall.

The SBI Cards IPO math 

The Rs 10,300-crore IPO of SBI Cards and Payment Services’ managed to attract bids worth Rs 2 trillion despite the selloff in the secondary market. The credit card issuer has set the issue price at Rs 755. For high net-worth individuals (HNIs), the acquisition cost works out Rs 870 after factoring in the interest cost. On listing, the shares will have to gain at least 15 per cent over the issue price for HNIs to make money. Grey market premiums have dropped to 10 per cent after last week’s market fall. Meanwhile, the IPO has seen nearly 3.1 million retail applications. On the basis of number of applications, the issued is subscribed 1.37 times. In other words, 100 out of 137 retail applicants will get allotment.   - Samie Modak

ETF overhang for YES Bank

Shares of YES Bank may continue to face selling pressure from exchange-traded funds (ETFs). The stock will be part of the Nifty index until March 27 following which it will be replaced by Shree Cement. The rejig will add to the selling pressure on the stock, say analysts. YES Bank will continue to remain part of the Bank Nifty and some mid-cap indices. According to data from Value Research, ETFs and index funds with the Bank Nifty as underlying have investments in the private lender. “Selling from passive funds will weigh on the share prices even if there are any possible reliefs from the government or Reserve Bank of India (RBI),” said a dealer.  - Jash Kriplani

Crude comfort for airline stocks  

Domestic aviation stocks SpiceJet and InterGlobe Aviation have hit an air pocket. Last week, both stocks hit their lowest level in one-year. The shares of SpiceJet have dropped 60 per cent from its 52-week high, while InterGlobe has come off by 37 per cent. Following this drop, some investors are of the view that both the stocks are good buying opportunities given the sharp drop in global oil prices. Brent crude prices have dived below $50 a barrel. “While the aviation sector has been hit by coronavirus, the fall in oil prices is a silver lining. SpiceJet and InterGlobe are largely domestic market focused. We think oil prices will be a significant tailwind if coronavirus worries subside,” said a fund manager.  - Sundar Sethuraman