SBI Card Stock Price, RBI Credit Card Rules, Stock Market Today: Shares of SBI Cards and Payment Services in Monday’s (November 20) session opened 1.62 per cent higher at Rs 741.95 apiece on the BSE. In the previous session, after the RBI’s crackdown on unsecured personal loans and new lending norms, shares of the credit card company ended down over 5 percent at Rs 732, 15 per share.
In view of the new RBI guidelines on unsecured loans, the capital adequacy ratio of the company will come down by up to 4 per cent and if the need arises, the company will increase its capital by level 2 and there is no need to raise equity capital, SBI Card said.
« We do not expect any significant impact on our funding costs this financial year. It may increase slightly in absolute terms on an annualized basis. We would like to emphasize that as a large and well-capitalized NBFC, the new rules open up opportunities for good quality customer acquisition, SBI Card said in its exchange filing.
Domestic brokerage firm Motilal Oswal estimates that the 25 per cent increase in risk weight on CC/PL/consumer durable loans is likely to result in an impact of 30 to 85 basis points on capital ratios, at the exception of SBI card. Furthermore, it indicates that the credit card company is the most vulnerable, with an impact of 416 basis points. A basis point, or basis point, is equal to one hundredth of a percentage point.
Brokers’ views on the post-RBI directive
Morgan Stanley is bullish and has given it an overweight rating. The foreign brokerage has set a target of Rs 950, implying potential gains of 23 per cent. The brokerage said the impact of RBI measures on Tier 1 ratio will not constrain the company’s operations, while the impact on cost of funds is expected to be manageable. The brokerage believes there is less risk that the company will have to sharply slow unsecured credit growth.
SBI Card was an underperformer, with a cumulative return of -7.6 percent. In contrast, Nifty Financial Services during the same window rose 3 percent.
