Caryle’s returns hopes dashed in SBI Cards IPO as pandemic drags down pricing – report

807

Carlyle-backed SBI Cards & Payment Services has succumbed to a rocky stock market debut exacerbated by the coronavirus pandemic.

The Indian credit card issuer’s shares opened at 658 rupees, below its 755 rupees offer price, according to a Bloomberg report.

The stocks rallied to a high of 755 rupees, but closed at just over 681 rupees, giving the company a valuation of about $8.6bn.

Carlyle Group bought a 26 per cent stake in the company back in 2017 from General Electric’s lending unit for around 20 billion rupees.

The State Bank of India held the remaining 74 per cent stake and looked to sell four per cent of its shares through the IPO, while Carlyle put a 10 per cent stake on the block.

Sources familiar with the matter told Reuters in November last year that the IPO was set to value Carlyle’s stake at close to seven times its 2017 purchase price, representing about 60 billion rupees.

The IPO was held at less the ideal time as the global outbreak of coronavirus has shaken stock markets globally and reduced the appetite for risk, particularly in India.

Despite its more muted pricing, the $1.4bn IPO was 22.5 times oversubscribed, and raised 70.4 billion rupees ($952m) for SBI and Carlyle.

The Singapore government and Kuwait Investment Authority were among 74 anchor investors in the IPO, which together raised 27.7 billion rupees.

Copyright © 2020 AltAssets

Get the latest PE News & Research delivered to your inbox every morning