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SBI Cards aims to keep non-performing assets at 2.4-2.5%: CEO Prasad

Gross non-performing assets stood at 2.47% at the end of last year, down from around 2.9% in March 2018

Reuters  |  Mumbai 

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India's Cards aims to keep the proportion of at 2.4%-2.5% of its total assets, Chief Executive Officer Hardayal Prasad said on Tuesday while addressing the media ahead of the company's initial public offering.

Gross stood at 2.47% at the end of last year, down from around 2.9% in March 2018.

Cards and Payments Services Ltd, the credit card subsidiary of the country's largest lender (SBI) , aims to raise nearly $1.25 billion via an initial public offering.

The company plans to issue new shares worth 5 billion rupees and will offer up to 130.5 million shares for sale, according to its prospectus released earlier this month. The price range for the IPO has been fixed at 750-755 rupees per share.

The issue will open for subscription on March 2 and close on March 5. Cards has the second largest market share in terms of number of cards and also in terms of market spend.

The company has had several discussions with the government on the fees merchants pay for the processing of card payments and has been assured that credit cards will not be affected, Prasad said at the briefing.

India's Finance Minister Nirmala Sitharaman last year said businesses with annual turnover of 500 million rupees will not have to pay a merchant discount rate on debit card and other digital modes of transactions, excluding credit cards.

SBI Cards is 74% owned by SBI while Carlyle Group owns the remaining 26%. Carlyle bought the stake in 2017 from the lending arm of General Electric for about 20 billion rupees.

As a part of the IPO process, SBI will divest 4% of its stake, while Carlyle is set to sell 10% of its stake.

First Published: Tue, February 25 2020. 18:06 IST