The IPO will be open for subscription from March 2 to 5.
Under normal circumstances, an IPO is open for subscription for a minimum period of three and a maximum of 10 working days under certain circumstances.
The Rs 10,352 crore SBI Card IPO ((including a fresh issue of Rs 500 crore) will be India’s fifth biggest issuances after Coal India (Rs 15,100 crore), Reliance Power (Rs 11,563 crore), GIC RE (Rs 11,370 crore), ONGC (Rs 10,543 crore).
The Coal India issue was open for four days. The biggest issue was sold from October 18 to 20, 2010, for qualified institutional bidders, and from October 18 to 21 for retail and HNI investors.
With SBI as its parent and 35 per cent of the issue reserved for retail investors, the SBI Card issue is expected to see huge demand. This has led iBankers to seek an extra day to ensure that retail investors get to file their applications on time and no extension is required.
“To ensure smooth conduct of the application process and accommodate retail investors from remote locations, we, on behalf of the promoter and company, requested the market regulator to give one more day so that exchanges can accept all applications up to 5 pm on the fourth day, exchange personnel need not work late on closing day and it becomes a win-win situation for everyone,” representatives of the book running lead managers (BRLM) told ETMarkets.com.
Generally, retail and HNI investors take cue from QIB subscription, which closes by 3:30 pm and retail and HNI applications keep coming in till late on the last day.
In the case of SBI Card IPO, the portion reserved for retail investors is worth around Rs 3,200 crore.
If the retail quota is fully subscribed, based on the lot size of 19 equity shares, 22.5 lakh forms would be needed for one-time subscription.
“Considering the initial feedback on demand and investor interest, we are expecting a huge number of applications as was witnessed in all the successful mega IPOs in the past,” the BRLM representative said.
Under normal circumstances, an IPO is kept open for a minimum of three days, which can then get extended by at least three more working days if the issuer decides to revise the price band.
In case of force majeure (unforeseeable circumstances that prevent someone from fulfilling a contract), banking strike or similar circumstances, the issuer can extend the bidding period for a minimum of three working days.
On receiving strong bids, the issuer can even close the offer period for QIBs a day prior to closing date.
In the SBI Card IPO, about 1.31 crore shares have been reserved for investors, who were State Bank of India shareholders as on February 20. They can apply in both retail and shareholders categories if the application amount falls within the limit of Rs 2 lakh.
The SBI arm has fixed the IPO price band in the Rs 750-755 range. The IPO, which will include the issue of Rs 500 crore worth fresh shares and an offer for sale (OFS) of up to 13.05 crore shares, may fetch about Rs 10,350 crore at the upper limit of the price range.
