Carlyle sells 3.4% stake in SBI Cards for $ 443 million

MUMBAI : Private equity firm Carlyle Group will nearly halve its stake in SBI Cards and Payment Services Ltd by up to $ 443 million, or ??3,267.2 crore, under the terms of the deal as seen by Mint.

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

Carlyle will offer the shares at an indicative price range of ??1,021 to ??1,072.3 each.

On Monday, shares of SBI Cards closed at ??1,071.70 on BSE. Shares have risen nearly 26% year-to-date.

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

This follows Carlyle’s sale of a 5.1% stake in SBI Cards for ??4,811 crore in June, while in March it offloaded just over 4% in the credit card company for about ??3,800 crore via bulk transactions. Sales of units followed the public listing of SBI Cards in March of last year.

Carlyle sold a 10% stake in SBI Cards for just over ??7,000 crore, marking the largest private equity outflow through a first sale of shares 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 the state-run State Bank of India and Carlyle.

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

For the quarter ended June 30, SBI Cards achieved a net profit of ??305 crore, a decrease of 22% from ??393 crore a year earlier.

The drop follows a surge in bad debts for SBI’s card business after the second wave of covid disrupted businesses in the June quarter.

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

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

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