SBI Cards & Payment Services Ltd. - IPO Note28-Feb-20
SBI Cards is the second-largest credit card issuer in India, with 17.9% market share of the Indian credit card market in terms of total credit card spends during 9MFY20.
Low penetration in SBI customer base plus strong distribution means SBI Cards’ card base can continue to grow at historical growth rates of 27% CAGR (over FY15-19). Increased focus on EMI products can lead to loan book growing at an even faster pace. However, growth in fee income could fall given stagnating per card spends and market-share loss to UPI. Whilst asset quality has held up till now, a slowing economy and job losses can lead to increase in NPAs. Valuations at 46x FY20E post issue P/E is at 222% premium to Global Card cos (having lower growth & ROE) and at a 10% discount to high growth, high RoE Indian lenders. We recommend applying for the issue and rate the IPO as ‘SUBSCRIBE’.
CSB Bank Ltd - IPO Note22-Nov-19
we recommend subscribing to the issue from a long term perspective.
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