US private equity (PE) major Carlyle’s arm has decided to offload 5.1% stake in government-backed SBI Cards and Payment Services Ltd for around Rs 5,000 crore (about $675 million).
CA Rover Holdings, a PE fund and affiliate of Carlyle, will offer a total of 48 million shares of the credit card company at a price of Rs 1,002-1,041.3 per share. The stake sale will be done through a block deal.
This will reduce the PE firm’s stake in SBI Cards to about 6.5%. Shares of SBI Cards plunged over 5% to a day’s low of 981.30 per share on BSE till noon.
After the day’s trade, block deal disclosure showed that Morgan Stanley Asia (Singapore) Pte had picked up 54.10 lakh shares at Rs 1,002 apiece, for Rs 542 crore. The Carlyle arm sold 3.7 crore shares for Rs 3,750 crore, at an average price of Rs 1,002 apiece.
On March 17 this year, CA Rover Holdings had sold 4.3% stake (40 million shares) in SBI Cards via block deals. The shares were sold at Rs 986 per share, with Carlyle making around Rs 3,944 crore.
The sale reduced CA Rover Holdings’ stake from 15.86% to 11.61% as on March-end 2021.
Carlyle had invested in SBI Cards through its fourth Asia buyout fund, which focuses on control deals and makes significant minority investments in established companies across the continent excluding Japan, in 2017.
In March last year, SBI Cards had launched its initial public offering (IPO) in which Carlyle sold a 10% stake for Rs 7,000 crore, making a gain of 8.5 times in three years.
The shares of SBI Cards were listed at a sharp discount over the issue price owing to the pandemic-led freefall in stock markets in March 2020.
SBI Cards, which started operations in 1998, is the second-largest credit-card issuer in terms of number of cards outstanding and the amount spent. It had 11.9 million cards outstanding as on April end 2021 with just over Rs 11,000 crore worth of transactions.