Investing in stock means investing in business. Ace American investor Charlie Munger once said that money is not in the buying and selling of business. One should hold a stock as long as one can. However, this theory doesn’t hold well regarding SBI Card IPO. The public issue was launched in March 2020 at ₹755 apiece. After five years of listing, the SBI Card share price has oscillated around ₹855 apiece on the NSE, delivering around 13% returns to those allottees who remained invested in the scrip till today.
Looking at the CAGR (Compound Annual Growth Rate) given by SBI Card shares after listing on the BSE and the NSE, the ICICI Direct CAGR calculator suggests that SBI Card IPO has delivered an annual return of 2.52% to its share allottees in the last five years, which is less than 50% of the yearly returns given by SBI Fixed Deposit (FD) in this period.
SBI FD interest rate
When the SBI Card IPO was launched, the SBI FD interest rate on deposits for five years or more tenor was 5.70%. If an investor had invested in SBI FD instead of the SBI Card IPO in March 2020, their annual return on this risk-free investment would have been 5.70% per annum. Had the investor been a senior citizen (over 60), the yearly return on SBI FD post-SBI Card share listing would have been 50 BPS more. This means the senior citizen investor had received a 6.20% return per annum on one’s investment in SBI FD.
SBI Card share price history
SBI Card IPO hit the Indian primary market on 2nd March 2025 and remains available for investors until 5th March 2025. SBI Card shares listed on the BSE and the NSE on 16th March 2025. SBI Card’s IPO size was ₹10,354.77 crore, a mix of fresh shares and offers for sale (OFS). Of ₹10,354.77 crore, ₹500 crore was aimed through the fresh shares, while ₹9,854.77 crore was reserved for the OFS. So, the public issue was almost an OFS. The much-hyped public issue of the SBI Cards and Payment Services Ltd had a discounted listing. SBI Card shares are listed on the BSE at ₹658 apiece, while on the NSE at ₹661 per share.
On why SBI Cards failed to meet the expectations of primary market investors, Avinash Gorakshkar, Head of Research at Profitmart Securities, said, “The SBI Card IPO was offered at a higher valuation. The second and most important reason for SBI Cards being unable to make it into the league of quality stocks of Dalal Street was its OFS exposure. It was almost OFS as just ₹500 crore out of ₹10,354.77 crore comprised fresh issues. So, net proceeds from the public issue went into the pockets of the promoters instead of the company’s balance sheet. In other words, the SBI Card IPO was almost a non-event for the company. However, one should not blame SBI Cards and Payment Services Ltd for this as most companies with their public issue want to get the maximum of their stock offloading exercise. A company with big face value does this quite often. Recently, we saw this happening with Paytm IPO and Tata Technologies IPO.”
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
