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23 May, 2024 13:57 IST
SBI Cards IPO premium justified due to visible growth opportunities: Samco Securities

The SBI Cards IPO comprises a fresh equity issue worth Rs 5 billion and a total dilution of around 14 percent is expected to be done through SBI Cards IPO via an Offer For Sale (OFS) route.

Umesh Mehta, Head of Research, Samco Securities said ''The most awaited IPO of the season SBI Cards is here and we are all for investors to subscribe to this Rs 103.55 billion IPO.''

SBI Cards and Payments Services would be the very first in the credit card space to be listed on Indian bourses. Mehta continued, ''This company has significantly gained public interest and justifiably so as it is the second largest credit card issuer with a market share of 18.1%, only after HDFC Bank with a market share of approx. 27%.''

''Additionally, it is the most profitable vertical of SBI Bank, it's largest and only promoter, which reflects their commitment to maintain and garner growth within the overall industry. We also cannot ignore the diversified reach of SBI Cards through a network across multiple channels, along with SBI's vast customer base of around 445.5 million,'' opined Mehta

''Financially as well as operationally, the company has delivered robust performance in the past three-years. Hence, the premium asked for this issue is justified giving due respect to the visible growth opportunity of the industry in its entirety,'' he concluded.

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