The Securities and Exchange Board of India (SEBI) has given its in-principle approval for the initial public offering (IPO) of SBI Cards and Payment Services, a subsidiary of the country's largest lender State Bank of India.

The company is likely to raise approximately Rs 5,500-6,000 crore through its IPO, sources said, adding that the IPO would value the company at approximately Rs 55,000-60,000 crore.

SBI Cards is likely to launch its IPO towards the end of February.

Moneycontrol was the first to report on the SBI Cards IPO in September 2019.

As per the DRHP filed with SEBI in November last year, the public issue comprises a fresh issue of Rs 500 crore and an offer for sale of up to 13,05,26,798 equity shares.

The offer for sale includes up to 3,72,93,371 equity shares by SBI and up to 9,32,33,427 equity shares by CA Rover Holdings.

SBI Cards intends to use the proceeds of the fresh issue for augmenting its capital base to meet future capital requirements.

State Bank of India holds a 74 percent stake in SBI Cards and the rest is held by CA Rover Holdings, an affiliate of Carlyle Asia Partners IV.

The book running lead managers to the issue are Kotak Mahindra Capital Company, Axis Capital, DSP Merrill Lynch, HSBC Securities and Capital Markets (India), Nomura Financial Advisory and Securities (India) and SBI Capital Markets.