SBI Card Shares Lists At 12.45% Discount, Close 9.15% Below Issue Price

The hyper volatility prevailing in the secondary markets witnessed during last couple of weeks took its toll on the listing of SBI Cards and Payment Services (SBI Cards) when its shares came to listing on the bourses on Monday. The shares of SBI Cards listed at a hefty discount of 12.45 per cent at Rs 661 against its issue price of Rs 755 on the National Stock Exchange (NSE) on Monday. On the BSE, it opened at Rs 658, 13 per cent lower against issue price. The stock eventually ended at Rs 683 apiece on the BSE.

The stock saw a weak debut due to prevailing market condition as the uncertainty regarding the effect of the coronavirus epidemic continued to keep investor sentiment in check. The benchmark indices Nifty50 and S&P BSE Sensex have declined 16.6 per cent since the SBI Card initial public offer (IPO) opened for subscription on March 2, 2020. The indices have tanked nearly 21 per cent, since the credit card arm of the State Bank of India (SBI) filed Draft Red Herring Prospectus (DRHP) for its IPO with Sebi on February 26.

Almost all brokerages were positive on the initial public offer (IPO) and some had predicted up to 60 per cent upside from the IPO price range of Rs 750-755, given its dominant position in the credit card market and strong parentage, SBI Card is well placed to benefit from the rising trend of digital payments and e-commerce.

Outlook Money in its Sunday web edition had reported quoting certain industry watchers earlier that there is a possibility of muted listing of the IPO against the hefty premium that prevailed the Grey market following closure of the IPO. However, fears over coronavirus spread may shrink the premium even further. The coronavirus outbreak coupled with oil crisis has led to a major blow to the stock market, which is why investors arefearing of a tepid listing of SBI Cards, t said.

With high expectations of muted premium against earlier expectations of 30-40 per cent, the investors who betted under the high net worth individuals may take a huge beating, as many of them borrow money at a high-interest rate, the report said.

The SBI Card share closed at Rs 681.40, down 9.15 against the issue price of Rs 750 per share at the close of debut day. At the NSE, the SBI Cards counter clocked the trading volume of around 6.09 crore shares.