SBI Cards and Payment Services' IPO open for subscription between Mar 2-5

SBI Cards and Payment Services' initial public offer of around Rs 9,000 crore will open for subscription on March 2 amid volatile stock markets due to deepening concerns over coronavirus outbreak.

For qualified institutional buyers (QIBs), the subscription will close on March 4 while the issue closes on March 5, SBI Cards and Payment Services managing director and chief executive Hardayal Prasad said on Friday.

SBI Cards has set the price band at Rs 750-755 for the share sale.

According to drafts paper, the proceeds from the IPO will be used to augment the firm's capital base to meet future capital requirement.

"The net proceeds are proposed to be utilised for augmenting our Company's capital base which will be utilised towards company's business and growth including towards extending credit to our customers, meeting our operating expenditure and future working capital requirements which are expected to arise out of the growth of our business," it said.

According to the draft papers, SBI Cards will offer up to 130,526,798 equity shares through an offer-for-sale route. This will include up to 37,293,371 share sale by SBI and up to 93,233,427 shares on offer by Carlyle Group. In addition, the company will also issue fresh equity shares of Rs 500 crore.

SBI holds 76 per cent in SBI Cards and the rest of the stake is held by Carlyle Group.

SBI Cards is the second-largest credit card issuer in India with an 18 per cent market share, Prasad said.

The IPO is hitting the market at a time when investor sentiment is shaken by growing coronavirus concerns. Market benchmark index Sensex plummeted 1,448 points on Friday following a manic global selloff as market participants fretted over the impact of the rapidly-spreading coronavirus.

According to analysts, markets are increasingly getting worried about the rapid outbreak of coronavirus across geographies and the consequent economic fallout.