India-based SBI Cards & Payments Services has raised a total of INR7bn ($100.9m) from numerous financial firms in the second half of fiscal year 2019 to support its growth.
The card issuer secured INR1bn from ICICI Securities Primary Dealership, while its parent company State Bank of India contributed INR2.5bn, reported LiveMint.
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Canara Bank and Axis Bank each issued non-convertible debentures (NCDs) worth INR500m at 9.15% coupon. Axis Bank provided additional INR2.5bn at a coupon of 9.55%.
The fundraising is in line with SBI Card’s plan to raise a total of INR15bn.
SBI Card CEO and managing director Hardayal Prasad was quoted by the publication as saying “Now, we are also tapping the vast SBI customer base through Project Shikhar under which we are offering pre-approved cards to eligible SBI customers. We believe that this will significantly drive new card acquisition.”
Statistics from Reserve Bank of India (RBI) show that SBI Card had 7.9 million outstanding credit cards in the market as of February this year.
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By GlobalDataThe company is over four million cards behind the market leader HDFC Bank, whose tally of outstanding credit cards stood at 12.48 million during the same period.
Data further revealed that between February 2018 and February 2019, SBI Card has grown its outstanding cards by 31.8%. It issued 1.93 million new cards while HDFC Bank added 1.94 million cards.
Prasad added: “We have been able to maintain a sharp focus on our business that has resulted in increased acquisition rate of over 2.5-3 lakh (250,000-300,000) cards per month currently from 1 lakh (100,000) cards per month in December 2016.”
LiveMint added that SBI Card also received INR15bn working capital line from Central Bank of India, along with INR110bn from its parent firm and INR15bn from Canara Bank.
