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* Incorporated in 1998, SBI Cards and Payment Services (SBIC) is the second-largest credit card issuer in India (next to HDFC Bank), with 18% market share of the Indian credit card market in terms of the number of credit cards outstanding and 17.9% market share in terms of total credit card spends as on September 2019.
* SBIC offers an extensive credit card portfolio to individual cardholders and corporate clients which includes lifestyle, rewards, travel and fuel, shopping, banking partnership cards and corporate cards covering all major cardholder segments in terms of income profiles and lifestyles.
* State Bank of India (SBI) owns 74% in the company and the rest is owned by CA Rover (controlled by Carlyle Group). Prior to December 2017, SBI had 60% stake with GE Capital owning remaining 40%. In December 2017, GE Capital completely exited from the company. Post this event, SBI increased its stake to 74% while CA Rover bought the remaining 26% stake.
* As a subsidiary of SBI, the company has access to SBI's extensive network of 22,007 branches across India. The partnership enables it to market its cards to a huge customer base of 43.6 cr customers. SBIC has partnered with several leading names across industries, including Air India, Apollo Hospitals, BPCL, Etihad Guest, Fbb, IRCTC, OLA Money and Yatra, amongst others
* SBIC has a diversified revenue model whereby the company generates both non-interest income (primarily comprised of fee-based income such as interchange fees, late fees and annual fees, among others) as well as interest income on credit card receivables. Share of non-interest income has steadily increased over the past three years, from 43.6% in FY17 to 48.9% in FY19.
* The company's total income increased at a CAGR of 44.9% and the revenues from operations have increased at a CAGR of 44.6% between FY2017 to 2019. The net profit grew at a CAGR of 52.1% during the period.
* The issue is priced at ~48x 1HFY20 EPS (annualised) of Rs 15.6 and ~16x BVPS. It does not have any listed peers on domestic stock exchanges.
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