Fintech and UPI to be a competition for SBI Cards IPO
SBI Cards and Payment Services stated that fintech and UPI (Unified Payments Interface) acts as formidable competitors. So then, it mentioned in a filing of the prospectus for its upcoming IPO.
However, before going for an IPO, it remains compulsory for a company to list out its risk factors. So then, the public would make an informed decision. Hence, in its prospectus, SBI Cards said the primary competition for the company might exist from other credit card issuers. And also, debit card issuers to some extent.
Besides, the new players with innovative products have come up now. However, the credit card company has competitions from businesses that operate their mobile wallets.
Also, SBI Cards mentioned that mobile, e-wallet, and tokenization platforms, including the increasingly prevalent UPI, might turn out as a competition. Because of their ability to attract large payment volumes at low or no payment processing fees to merchants.
Despite this, SBI Cards anticipates competition to increase in the future. However, the company’s asset quality remained healthy. As of Dec 31, the gross non-performing assets (NPAs) as a percentage of gross advances stood as 2.47%. Also, it has a net NPA as a percentage of net advances to 0.83%. So then, this turned up as a slight deterioration from Mar 31, 2019, level when the gross NPA ratio remained 2.44%. And the net NPA ratio came up to 0.83%. Also, in March 2018, the gross and net NPA ratios stood at 2.83% and 0.94% respectively.