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US private equity fund CA Rover Holdings, an affiliate of Carlyle Asia Partners, is looking to sell a 4% stake in SBI Cards and Payment Services worth $514 million or Rs 3728 crore through a block deal on Wednesday, according to a term sheet issued by the sole book-runner BofA Securities. With nearly 970% returns in four years, SBI Card investment would be the best exit by a PE fund on an Indian investment, trumping even Warburg Pincus’s big payday with Bharti, one that sparked the private equity boomtime in India in the 2000s.
The sale price has been fixed at Rs 981.80-1,022.10 apiece, which is as much as 3.9% lower than Tuesday’s closing price of Rs 1022. As of December 31, 2020, CA Rover Holdings held 15.86% of the company. The Washington HQ buyout group had acquired a 26% stake in SBI Cards from the GE group for Rs 2,000 crore in 2017, valuing the company at Rs 7200 crore. Three years later, last March, the company, India’s second-largest credit card firm, launched its maiden initial public offer (IPO) where Carlyle sold 10% for Rs 7,000 crore and made a gain of 8.5 times in three years.
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Shares of SBI Cards have rallied 35% from its IPO price of Rs 755. The Carlyle Group, which is now selling 4%, will continue to hold an 11% stake, currently valued at Rs 10,574 crore. SBI Cards, one of the most profitable companies in the Indian credit business has been gaining market share in both the number of cards and spends.
