SBI Card IPO: YES Bank clients asked to pay using different bank account

Investors who have applied for SBI Cards’ initial public offering (IPO) have been given allotment with the condition that they will make the payment using a different bank account before Friday, said people in the know. This ends the uncertainty on whether YES Bank’s clients would be considered for allotment, in light of the 30-day moratorium imposed by the Reserve Bank of India. The allotment for the Rs 10,300-crore share sale was finalised on Wednesday.
 
Nearly Rs 1,500 crore worth of bids in the IPO have come from YES Bank accounts. A bulk of these allotments were made by qualified institutional buyers (QIBs), followed by high net-worth individuals. Sources in the know say retail investor bids via YES Bank were around Rs 150 crore.

 
SBI Cards, the country’s second-largest credit card company, will make its stock market debut on Monday.
 

In case the YES Bank clients fail to make payments within two days, the offer for sale component of the IPO will be reduced, said a banker with knowledge of the development.
 
This means that both State Bank of India and private equity major Carlyle will end up divesting slightly less than what was originally intended. The SBI Cards IPO comprised of Rs 500 crore of fresh equity issuance and around Rs 9,800 crore worth of secondary share sale by SBI and Carlyle, who were divesting 4 per cent and 10 per cent of their holdings, respectively.

 
Market players are not ruling out the possibility of investors' payments not coming through.
 
“Some investors may not have sufficient funds in other bank accounts to pay, while others might deliberately not pay, given the volatility in the market,” said an official with a brokerage.
 
SBI Cards' IPO closed on Thursday. Since then, the market has corrected more than 7 per cent.
 
Market players said the grey market premium for SBI Cards has crashed from 50 per cent to below 5 per cent, given the correction in the market.