InvestorQ : SBI Cards has fallen nearly 35% since its list post the IPO; does that make a good entry point in the stock?
Rashi Mehra made post

SBI Cards has fallen nearly 35% since its list post the IPO; does that make a good entry point in the stock?

Answer
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sarah Leo answered.
5 months ago


SBI Cards and Payment Services, which recently got listed in the markets after a sharply good listing, tanked 15% after the 30-day lock-in for anchor investors ended. With this fall, the SBI Cards stock has fallen 30% from its issue price of Rs 755 per share and is trading at the lowest level since listing on March 16.

The IPO had received a bumper response due to its profitable business model and the fact that it was backed by the formidable SBI group. However, the slump in the market due to the Coronavirus pandemic combined with rich valuations resulted in the stock weakening further.

Spending has fallen due to the lockdowns and that could impact credit appetite of consumers. However, the lockdown is again going to be a push to digital and the credit card business should benefit. As an investor, you can adopt a phased approach to picking up the stock at regular intervals.

Your primary focus should be on the anchor investment lock-in getting lifted. Both domestic fund houses and overseas investors have raised stake in SBI Cards in the quarter ended March.