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CSB Bank to launch IPO on November 22; price band set at 193-195/share

November 19
21:32 2019

Kerala-based CSB Bank (erstwhile Catholic Syrian Bank) will open its initial public offering for subscription on November 22, at a price band of Rs 193-195 per share.

The IPO consists of a fresh issue of equity shares aggregating up to Rs 24 crore and offer for sale of up to 1,97,78,298 equity shares.

“Fairfax will continue to hold about 50.09 percent stake in the bank after listing. Fairfax will have to reduce the stake to 15 percent in 15 years as per RBI norms,” the management told CNBC-TV18.

Canadian billionaire Prem Watsa’s Fairfax India through FIH Mauritius Investments Ltd (FIHM) had bought 51 percent stake in the bank after the RBI approval in 2018 and had infused capital of around Rs 1,207.68 crore against this stake in the bank.

Shareholders which are selling shares through an offer for sale are HDFC Life Insurance Company, ICICI Prudential Life Insurance Company, The Federal Bank, Bridge India Fund, Satellite Multicomm, Way2Wealth Securities, ICICI Lombard General Insurance, Vinod Mohan Nair, Edelweiss Tokio Life Insurance, P-Cube Enterprises etc.

The issue will close on November 26. Bids can be made for a minimum 75 equity shares and in multiples of 75 shares thereafter. The market cap of the bank would be Rs 3,348 – 3,382 crore post issue.

The private sector lender is aiming to raise Rs 405.72 – 409.68 crore through public issue.

The lender would utilise the net proceeds from the fresh issue towards augmenting its Tier-I capital base to meet future capital requirements.

CSB has a strong base in Kerala along with a significant presence in Tamil Nadu, Karnataka, and Maharashtra. It had a network of 412 branches (excluding 3 services and 3 asset recovery branches) and 290 ATMs as of September 2019.

Advances at the end of September quarter stood at Rs 11,402.8 crore, increasing 4.6 percent compared to Rs 10,905.5 crore in March 2019. In the same period, deposits grew by 2.5 percent to Rs 15,509.8 crore from Rs 15,123.9 crore.

On the asset quality front, gross non-performing assets (NPA) declined to 2.86 percent in Q2FY20 against 4.87 percent in FY19 and net NPAs dropped to 1.96 percent against 2.27 percent in same period.

Equity shares would be listed on both BSE and National Stock Exchange.

The book running lead managers to the offer are Axis Capital and IIFL Securities.Get access to India’s fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code “GETPRO”. Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.

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