Why SBI Cards shares fell 4% in opening trade

SBI Cards and Payment Services share price declined over 4 per cent in opening trade on Bombay Stock Exchange (BSE) on Wednesday amid report that US private equity fund CA Rover Holdings, an arm of Carlyle Asia Partners, to sell stake in the company through a block deal.

Reacting to the news, SBI Cards share price opened lower at Rs 1,008 against previous closing price of Rs 1,022.10. The stock of the company declined as much as 4.39 per cent to hit low of Rs 977.20. The market cap of the company declined to Rs 92,820.46 crore.

In a similar trend, SBI Cards shares were trading 3.63 per cent lower at Rs 985 on the National Stock Exchange. The stock opened lower at Rs 1,003.80 and touched a low of Rs 977.55 in first hour of day's trade.

Carlyle Group's arm will sell 38 million or 4 per cent stake worth as much as Rs 3,730 crore in SBI Cards & Payments Services through a block deal. At the end of December quarter of 2020, Carlyle held a 15.86 per cent stake in the credit card company.

The shares are being offered in a price range of Rs 981.80-Rs 1,022.10 per cent share, at a discount of 3.94 per cent (upper band) against Tuesday's closing price of Rs 1,022.1. BofA Securities is the bookrunner to the transaction.

SBI Cards was set up as a joint venture between SBI and GE Capital in October 1998. In December 2017, SBI and private equity player Carlyle Group had acquired the GE's 40 per cent stake. Currently, SBI owns 69.39 per cent stake in the company.

Meanwhile, the BSE Sensex was trading at 50397.88, up by 33.92 points or by 0.07 per cent, and the NSE Nifty was quoting at 14,913.9, up by 3.45 points or by 0.02 per cent.

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