Realizing the full potential of Indian stock markets, an increasing number of companies are coming out with Initial Public Offerings (IPOs) in India. In the last two years alone, around 40 companies came forward with IPOs looking to raise funds. Following the footsteps of these companies, SBI Card recently announced an Initial Public Offering worth around Rs. 10,300 crores. This makes SBI Card the first major IPO in the year 2020, and it’s likely to enjoy a very warm reception from stock market investors. Read on to know more about this IPO and how to invest in SBI card IPO in India.
SBI Card IPO overview
Before we move on to the instructions detailing the process of how to buy SBI card IPO in India, let us first take a look at some of the details of the SBI Card IPO.
A subsidiary of State Bank of India, SBI Cards and Payment Services was incorporated in the year 1998 and is currently India’s second-largest credit card issuing company. In its announcement, SBI Card revealed that subscriptions for the IPO would go on from the 2nd of March 2020 till the 5th of March 2020. With a face value of Rs. 10 per equity share, the total number of equity shares that would be open for subscription is pegged at 137,193,464 equity shares.
Since the entire IPO is a book built issue, the price band is fixed at Rs. 750 to Rs. 755 per equity share. The IPO offer features both an offer for sale and a fresh issue of shares. The proceeds of the fresh issue of shares aggregating up to Rs. 500 crores will be available to be utilized by the company for its future capital requirements. The remaining proceeds from the offer for sale aggregating up to Rs. 9,854.77 crores will go directly to the shareholders participating in this offer for sale and will not be made available to the company.
With a huge chunk of the credit card market share in its grasp, the SBI Card IPO is shaping up to be a wonderful opportunity for people looking to invest in wealth-creating stocks.
How to buy SBI card IPO online
Unlike the case for buying shares in the secondary stock market, a trading account is not necessary to apply for an IPO. If you’re wondering about how to buy SBI card IPO online, there are primarily two different ways you can go about it. Both of these are briefly explained below.
Option 1: Using your trading account
If you already have a trading and a demat account with a stockbroker, you don’t have to worry about how to invest in SBI card IPO in India, as the process is quite easy. While the process of applying for an IPO might not be the same across all trading accounts, the below-mentioned step-by-step process will give you a fair idea of how to buy SBI card IPO in India.
Step 1: Using your unique user ID and password, login to your trading account.
Step 2: Once you’re logged in, navigate to the IPO section of your trading platform.
Step 3: Among the list of IPO issues, choose the SBI Card IPO issue. Before you go ahead and apply for the issue, ensure to thoroughly read through the entire prospectus of the issue.
Step 4: Once that is done, click on apply. You will be automatically redirected to a page wherein you will be required to specify certain details such as investor status, bid details like number of shares bid for and price per share, and the number of applicants applying for the issue and their details.
Step 5: After you’ve filled out all the required details and before you apply for the IPO, make sure that your trading account number, your DP ID, and your DP account number matches.
Step 6: Upon verifying all the details in the page, click on apply.
Option 2: Using your net-banking facility
While you may not need a trading account to apply for an IPO via the net-banking method, you are still mandatorily required to possess an active demat account. Furthermore, the process for applying for an IPO might not be the same across all the net-banking portals. However, this step-by-step guide will give you a general idea about how to invest in SBI card IPO in India.
Step 1: Login to your net-banking portal using your unique user ID and password combination.
Step 2: Search for and navigate to the IPO application section in your net-banking portal.
Step 3: The portal will redirect you to a new webpage with the details of all the active IPO issues.
Step 4: Choose the SBI card IPO issue from the list. Before you click on apply, download and read through the prospectus of the issue since it will give you a lot more clarity on the IPO.
Step 5: Once you click on apply, you will again be redirected to a new webpage where you need to fill in certain details. Some of the details that you will have to specify are your investor status, the number of shares, price per share, and your depository details like the name of your DP, DP ID, and demat account number.
Step 6: After filling in all the details, click on apply.
So, that answers your doubts about how to buy SBI card IPO in India. It’s a simple enough process. And all you need to do is ensure that you have enough funds in your account to allow the transaction to be processed smoothly. And now that you know how to buy SBI card IPO online, you can invest in this issue and diversify your portfolio.