The shares of SBI Cards and Payment Services made a weak debut on the bourses with listing at a 13 percent discount to its issue price. The shares got listed at Rs 658 per share as against the issue price of Rs 755 per share on the BSE. The listing of the second-largest credit card issuer in the country took place at a time when global markets are reeling under the massive sell-off caused due to the outbreak of coronavirus pandemic.

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The investor sentiment has dampened amid the fears of the economic impact of the coronavirus epidemic.

"There are risks of defaults which can impact credit card business, However, over the long-term, business potential for credit card business is high. Lower prices in the near future will provide a good investment opportunity," said Kajal Gandhi, Analyst, ICICI Direct.

The benchmark indices, Sensex and Nifty have fallen 16.6 percent since the initial public offer (IPO) of SBI Card opened for subscription on March 2, 2020.

Jaikishan Parmar, Senior Equity Research Analyst at Angel Broking feels that the fundamentals of the company remain strong and the investors need not panic.

"The listing of the SBI Card shares below the issue price was due to the weak investor sentiment prevailing in the markets. The valuation of the stock is now better than the IPO price. Thus, the investors should hold the stock rather than selling as the company provides better fundamentals," Parmar said.

However, Parmar is of the view that if the virus spread is not contained within the next 3-4 months, then there would be "some basis points" risk to the asset quality of the company.

For the investors who did not get the allotment of shares, brokerages recommended buying at the current prices.

"The fundamentals of the company did not change amid the prevailing market conditions. The fall in share prices gives an opportunity to buy. In the next 12-18 months, we see SBI Card stock to trade around Rs 1,000 apiece," Parmar added.

The initial public offering (IPO) of the company had seen a strong response from qualified institutional buyers and high net worth individuals. Overall, the issue was subscribed a little over 26 times. The QIB portion of the book was subscribed 57 times and the HNI portion 44 times. The company had already raised Rs 2,769 crore from 74 anchor investors, including 12 mutual funds.

On Monday, shares of the company settled at Rs 678 (provisional) at the close of trading hours on the BSE as against the issue price of Rs 755.

First Published:Mar 16, 2020 4:01 PM IST