Most analysts and market experts are positive on the forthcoming Rs 10,000 crore initial public offering of SBI Card, which is going to hit the market on March 2.
The company has set the price band for the share sale at Rs 750-755. Promoters SBINSE -1.90 % will offload 3.73 crore shares and Carlyle Group 9.32 shares. SBI Card’s market share in terms of the number of credit cards outstanding stands at 18 per cent. While these recommendations are good to refer to, investors should also do their own homework before investing in the public issue. Here are 10 key financial parameters of the company that may influence your investment decision.
Net profit of SBI Card for FY19 increased 43.52 per cent year-on-year to Rs 862.70 crore from Rs 601.10 crore reported for the year-ago period. The figure stood at Rs 372.80 crore in FY17.
Net interest income
This figure increased by nearly 25 per cent year-on-year to Rs 2,558.50 in FY19. NII stood at Rs 1,359.70 crore as of March 31, 2017.
Return on equity (RoE)
The company has been maintaining an RoE of over 25 per cent. This figure stood at 30 per cent in FY19, 32.40 per cent in FY18 and 28.60 per cent in FY17.
Return on assets (RoA)
The company reported a return on assets of 4.80 per cent in FY19 against 4.50 per cent in FY18. The figure stood at 4 per cent in FY17.
Total assets of SBI Card stood at Rs 24,459.20 crore for the half-year ended September 2019 against Rs 20,239.60 crore as of March 31, 2018. The figure stood at Rs 15,686 crore and Rs 10,765 crore for the year ended March 31, 2018 and 2017, respectively.
Net worth of the company jumped 147 per cent to Rs 3,581.70 crore in FY19 over Rs 1,448.80 crore in FY17.
Percentage of gross non-performing assets (NPA) of SBI Card stood at 2.30 per cent as of September 30. The figure stood at 2.40 per cent and 2.80 per cent in FY19 and FY18, respectively.
Earnings per share (EPS)
The figure jumped to Rs 16.40 during the first half of FY20 against Rs 10.60 in FY19 and Rs 7.70 in FY18.
Impairment losses and bad debts
The figure stood at Rs 1,102.10 crore as of September 30 against Rs 1,147.70 crore as of March 31, 2019. Impairment losses and bad debt stood at Rs 800.10 crore and Rs 532 crore in FY18 and FY17, respectively.
Operating profit (pre-provision)
Pre-provision operating profit of SBI Card increased 9.74 per cent to Rs 2,720.70 crore for the nine-month ended December 2019. The figure stood at Rs 2,479.30 crore and Rs 1,719.40 crore in FY19 and FY18, respectively.