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Report: Banrisul Cartões valued at about 2.5B reais in IPO's initial talks

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Report: Banrisul Cartões valued at about 2.5B reais in IPO's initial talks

Brazil-based card payment company Banrisul Cartões SA has been valued at about 2.5 billion reais during the company's initial discussions with investors for its initial public offering, Valor Econômico reported, citing three sources.

The Banco do Estado do Rio Grande do Sul SA unit expected to garner at least 3 billion reais in initial valuation, but could also consider entering the market for a lower market value, the publication cited a senior manager as saying.

Another manager said the value could be as low as 2 billion reais.

The IPO will consist of the issuance of new preferred shares by Banrisul Cartões through a capital increase, as well as the sale of the company's preferred shares held by the Brazilian state of Rio Grande do Sul, which is the bank's controlling shareholder, in a secondary offering.

Meanwhile, another Valor source said the concentration of card operations in Brazil's southern region is an issue for Banrisul Cartões amid growing competition in the country's acquiring market, adding that "it is easier to increase the company's position in the southern market than to become a great national player."

As of May 28, US$1 was equivalent to 3.71 Brazilian reais.