SBICard begins valuation exercise as partner GECaps plans exit

With its long-time joint venture partner GE Capital deciding to exit the financing business globally, SBI Card has started a valuation exercise for a possible new investor or a public offer.
"We have started a formal valuation exercise to arrive at our current market value. The exercise may take a month from now to complete," SBI Cards & Payment Services (SBI Card) chief executive Vijay Jasuja told PTI over phone from Gurgaon.
SBI, the nation's largest lender, entered the credit card business in 1998 by roping in GE Capital India, consumer finance arm of GE Capital. GE Capital owns 40 percent stake, and the remaining stake is with SBI.

SBI Card has around 3 million active credit cards in circulation, making it the third largest player in the sector after HDFC Bank and ICICI Bank with a market share of 15 percent in FY15.
Parent SBI could not be contacted for comments as calls made to managing director and group executive for associates and subsidiaries V G Kannan remained unanswered.
Jasuja said the company is weighing three options. "First, SBI can buy back the entire 40 percent stake of GE Capital. Second, it can be sold to another investor through a private placement. Third, we can go in for a public issue."

However, he maintained that "as per the agreement reached between SBI and GE Capital at the time of formation of SBI Card joint venture, it was decided that whenever any party decides to exit JV, the decision has to be on the basis of mutual understanding."
Currently, SBI Card's board has eight members, three of them from GE Capital.
"We already have a base of 30 lakh cardholders. However, we are eyeing more than 10 crore customer base of SBI Group," Jasuja said.