SBI Cards and Payment Services to raise Rs 3,000 crore through NCDs

The board approved raising of funds by way of issuance of NCDs in one or more tranches, on a private placement basis

SBI Cards and Payment Services Ltd, on Monday, approved the raising of funds through the issue of non-convertible debentures (NCDs) up to Rs 3,000 crore.

In a regulatory filing, the company said, “The board of directors of the company, at its meeting held today, has, inter alia, approved raising of funds by way of issuance of non-convertible debentures (NCDs) aggregating to Rs 3,000 crore in one or more tranches, on private placement basis.”

In April, SBI Cards and Payment Services reported a surprise jump in its fourth-quarter profit, helped by strong consumer spending which outweighed higher funding costs.

Profit after tax for the quarter ended March 31 rose 2.7 per cent to Rs 596 crore ($72.8 million) from the previous year, while analysts had expected decline in profit to Rs 542 crore, according to Refinitiv IBES data.

The strong report card came amid a broader post-pandemic recovery in businesses and consumer spending, and improving asset quality at non-banking financial companies.

The company, backed by the country's top lender State Bank of India, said the cost of funds rose 185 basis points to 6.7 per cent from last year as interest rates remained high. Net interest margins, a key measure of profitability, fell 170 basis points to 11.5 per cent in the quarter.

Total expenses for the credit card services company climbed 39.3% to Rs 3,117 crore, including a 89.7 per cent jump in finance costs.

Total revenue from operations for the credit card services company grew 32 per cent to Rs 3,762 crore from a year earlier.

(With inputs from Reuters)