SBI Cards and Payment Services, the credit card unit of country’s largest lender State Bank of India, will launch its initial public offering on March 2, aiming to raise about Rs 9,000 crore.

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Sources told CNBC-TV18 that the SBI Cards IPO is expected to be priced in the range of Rs 745-775 per share.

The SBI Cards IPO comprises a fresh equity issue worth Rs 500 crore and an offer for sale of up to 130,526,798 equity shares. This will include up to 37,293,371 share sale by SBI and up to 93,233,427 shares on offer by Carlyle Group.

SBI Cards is second-largest credit card issuer in India, with an 18 percent market share.

SBI holds 74 percent in SBI Cards and rest of the stake is held by Carlyle Group. While Carlyle is looking to sell a 10 percent stake in the company via IPO, SBI would sell 4 percent.

The share sale is poised to become the fifth-largest IPO in the country after Coal India, Reliance Power, GIC Re and Oil and Natural Gas Corp (ONGC) and will help the parent, SBI, raise funds to boost credit growth.

For FY19-20, it is likely to be the largest IPO.

Emkay Securities said that, given the higher share of OFS, it seems that the IPO is primarily to unlock value for the existing investors (SBI and Carlyle) and also to provide an opportunity for non-promoters to invest in a direct play on India’s rising consumerism and digitisation story.

"For SBI, the IPO would imply a value of Rs 37 per share (post discount), which is higher than Street estimates, adding Rs 15 to the target price for SBI (Rs 350)," it added.

Kotak Mahindra Capital, Axis Capital, DSP Merryl Lynch, Nomura Financial Advisory, HSBC Securities and SBI Capital Markets are the book-running lead managers of the issue.

First Published:Feb 20, 2020 11:56 AM IST