Carlyle to sell 3.4% stake in SBI Cards for $443 million

Private equity firm The Carlyle Group will nearly halve its stake in SBI Cards and Payment Services Ltd for as much as $443 million, or ₹3,267.2 crore, according to deal terms seen by Mint.

CA Rover Holdings, a Carlyle entity, which as of June 30 held a 6.5% stake in the credit card issuer, will sell around 32 million shares, or a 3.4% stake in the company, through a block trade.

Carlyle will offer the shares at an indicative price band of ₹1,021 to ₹1,072.3 apiece.

Shares of SBI Cards closed at ₹1,071.70 on BSE on Monday. The shares have risen almost 26% since the start of the year.

Bank of America and Citigroup are advising Carlyle on the transaction.

This follows Carlyle selling a 5.1% stake in SBI Cards for ₹4,811 crore in June, while in March, it offloaded a little more than 4% in the credit card company for about ₹3,800 crore through block deals. The stake sales followed SBI Cards’ public listing in March last year.

Carlyle divested a 10% stake in SBI Cards for a little more than ₹7,000 crore, marking the largest private equity exit through an initial share sale in India.

SBI Cards began operations in 1998 as a joint venture with GE Capital Corp. In December 2017, GE Capital sold its 40% stake to state-run State Bank of India and Carlyle.

Last month, Carlyle undertook a block trade to sell its remaining stake in life insurer SBI Life Insurance Co. Ltd for around $289 million, Mint reported.

For the quarter ended 30 June, SBI Cards reported a net profit of ₹305 crore, a 22% drop from ₹393 crore a year earlier.

The decline followed a swelling of bad loans for the cards arm of SBI after the covid second wave disrupted businesses in the June quarter.

Total income increased to ₹2,451 crore during the quarter, from ₹2,196 crore a year earlier.

SBI Cards saw its gross non-performing assets more than double to 3.91% of gross advances as of June 30, compared with 1.35% a year earlier.