The IPO of CSB Bank opened on Friday for subscription. It is a three-day share sale which will now close on November 26. The bank is selling shares at the price of Rs 193-195 apiece.
The size of the CSB Bank IPO is about Rs. 410 crore which also includes the fresh sale of Rs. 24 crore. The rest is OFS by existing investors.
It must be noted CSB, formerly known as Catholic Syrian Bank, is one of the oldest private sector banks in India. It has a customer base of nearly 13 lakh people as recorded till March 31, 2019.
Allotment and Listing
The shares will be listed on both National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) on December 4, while they will be allotted on December 2, 2019.
The holdings of its promoter entity, Fairfax India Holdings Corporation is expected to go down to 49.73 per cent as the fresh issue component is relatively smaller. The RBI regulations mandate that the promoter has to reduce the stake to 40% in five years, 30% in 10 years and 15% in 15 years.
“While CSB Bank has a long operating history as a traditional bank, it is currently focusing on implementation of strategic changes in its business model to function efficiently as a full service new age private sector bank backed by its new marquee investor, Canadian billionaire Prem Watsa’s Fairfax India Holdings Corporation,” Livemint reported HDFC Securities as saying in a note.
CSB Bank had a network of 412 branches as per September 30, 2019 record.
Its gross NPAs went down from 7.25 per cent to 4.87 per cent as of March 31, 2017.
In September, the gross NPAs was recorded to be 2.86 per cent.
Its gross NPAs decreased to 4.87% as of March 31, 2019, from 7.25% as of March 31, 2017. Further, its gross NPAs was 2.86% as of September 30, 2019.
The net NPAs went from 4.12 per cent to 2.27 per cent as of March 31, 2017. In September, its net NPAs was 1.96 per cent.
Gold loans contributed 33.17% of its total advances, constituting a major portion of CSB’s advances as per September 30, 2019 record.
CSB Bank IPO: CSB Bank Outlook and Valuations:
The bank is its first phase of performance has done reasonably well. It has reduced the influence of unions and religious institution, rationalizing branches/employees and turning it from a capital-starved bank into a capital-excess bank after onboarding investor-cum-promoter Fairfax, NDTV quoted Mumbai-based brokerage firm Emkay as saying.
The second phase of the journey is being said to be challenging.