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Share SBI card & Payment Service (SBI Card) is priced at Rs 661, which is 12.45% lower than the issue price of Rs 755 on the National Stock Exchange (NSE) on Monday. At the BSE, its opening price was Rs 658, 13% below the issue price.
However, at 10:09 AM, the stock was trading at Rs. 751, having previously reached a high of Rs. 754 at BSE. So far, the total trading volume of the two exchanges is about 26 million shares.
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The initial public offering of the stock was weak due to poor market conditions, as uncertainty over the impact of the coronavirus epidemic continued to dampen investor sentiment. Since the benchmark indices Nifty50 and S & P BSE Sensex fell, they have fallen by 16.6%. SBI card The initial public offering (IPO) was opened for subscription on March 2, 2020. The index has fallen nearly 21% since the Red Herring Prospectus (DRHP) submitted to it by the Credit Card Division of National Bank of India (SBI). Sybi February 26.
Almost all brokers are optimistic about initial public offerings (IPOs), and given their dominance in the credit card market and strong mother-child relationship, some brokers predict an issue price range of Rs 750-755, a 60% increase , SBI card Benefit from the growing trend of digital payments and e-commerce.
Despite the challenging market environment, SBI Card's IPO still managed to attract bids worth Rs 2 crore. The offer to issue 100 million shares was close to 2.7 billion times (26 times). Qualified institutional buyers (QIBs) for IPOs received 57 shares, followed by high net worth individuals (HNI) (44 times) and shareholders (25.4 times). Employees are subdivided into 4.7x subscriptions and the retail segment is 2.5x subscriptions.
SBI card It is the second largest credit card issuer in India. As of November 30, 2019, its market share was 18.1% based on the number of outstanding credit cards. SBI Cards offers various types of credit cards (ie lifestyles) based on the needs of retail customers. Cards, rewards, shopping, travel and cheering). It also offers corporate cards and is the largest co-branded credit card issuer in India. It also works with small or regional banks to issue cards.
"The SBI card offers investment opportunities with strong profitability in a unique business model. Higher business growth and the sustainability of strong returns have justified the premium valuation of the business.
Angel Broking said that despite the high valuations, we are optimistic about the company's future prospects given the good prospects of the industry, the large number of undeveloped SBI banks' customers and good financial records.
According to data from Emkay Global Financial Services, the penetration rate of India's credit card industry is still seriously insufficient (4 cards per 100 people, compared with more than 30 cards per 100 people in developed economies), and the brokerage firm considers SBI cards to be the second largest Credit card companies with pure parental (SBI) pure game products are in a good position to maintain a strong growth trajectory and sustainable higher returns, thus obtaining higher valuations.
What should investors do now?
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Most analysts say investors with long-term investment prospects should remain the same. "Usually, if the issue fails, it takes at least 6 months to 1 year to stabilize. Therefore, if the investment period is 3-5 years, then the wise choice is to hold the stock, but to seek a listing gain should sell the stock ”Suggested AK Prabhakar, research director at IDBI Capital.
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Siddhartha Khemka, director of retail research at Motilal Oswal Financial Services (MOFSL), also believes that long-term investors don't have to worry about the mild listing of stocks. Khemka said that market conditions have completely changed since the release. So how the SBI card will not be affected when the most blue chip companies and solid companies have corrected as much as 40%.
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Khemka advises: "Investors who have not received a rights issue should use this opportunity to start accumulating stocks, but don't blindly invest all their funds. The" buy on dips "strategy is the best way to follow.