India’s largest public sector bank, State Bank of India is planning to float an initial public offer for its credit card subsidiary, SBI Cards. This has been disclosed through a filing the bank has made with the stock exchanges.

“Pursuant to the applicable provisions of the SEBI (LODR) Regulations, 2015 we advise that the Executive Committee of Central Board of the Bank at its meeting held today has given in-principle approval to explore the possibility of diluting SBI’s stake in SBI Cards & Payment Services Private Limited, a subsidiary company through IPO route at an opportune time, subject to the approval of RBI and other regulatory agencies in this regard,” the company said in a regulatory filing.

The credit subsidiary of SBI is a joint venture between State Bank of India and Carlyle Group and the shareholding with the two entities is in the ratio of 74%:26%. This is the stake that SBI will now offer to the public through the IPO. The bank had already obtained the clearance from the National Company Law Tribunal (NCLT) for the merger of the company which cleared the way for the IPO.

This credit card venture is a successful one for SBI with 7.5 million cardholders and a revenue of Rs 5,144 crore. SBI Card posted a profit of Rs 363 crore. The revenue climbed 53% over the previous year while the profits took a minor dip. It has been adding new customers too at a brisk clip. Only HDFC Bank has a larger customer base in the Indian context.

The other significant aspect of SBI Cards is that a substantial part of the users of their credit cards are from outside of the top 10 cities. The penetration into the tier 2 and 3 towns has ensured that the growth recorded in the number of value of transactions from these non-metropolitan areas is as high as 60 to 70% year-on-year.

There are delinquencies as any credit product would encounter but it remains below 2.5% according to the company.