CSB Bank Rs 410-cr IPO oversubscribed by 87 times as HNIs see massive 165x subscription

CSB Bank Rs 410-cr IPO oversubscribed by 87 times as HNIs see massive 165x subscription

The Rs 410-crore public issue of private sector lender CSB Bank received an amazing response from all categories of investors on November 26, the last day of bidding. Reports reveal that the IPO has been oversubscribed by 86.90 times, receiving bids for 100.4 crore equity shares against its issue size of 1.15 crore shares.

The portion set aside for non-institutional investors was subscribed 164.68 times, even as retail investors continued to pour in money, oversubscribing 44.36 times.

The public issue opened for subscription on November 22 with a price band of Rs 193-195 per share, consisting of a fresh issue of shares to rise up to Rs 24 crore and an offer for sale of 1.97 crore shares by existing investors.

“CSB’s performance has not been encouraging in the past with the rise in NPA level. However, new promoters and strong management bring capital and execution strength on the table, which bodes well for future growth as well as earnings. Therefore, we assign a subscribe recommendation to the stock,” ICICI Direct said.

“CSB Bank has seen a remarkable turnaround after the new promoter took charge of its affairs in FY19. FIHM is originally promoted by Canadian billionaire Prem Vatsa, known for making strategic investments turning businesses around. The impact is visible in the second half of FY20 numbers where CSB returned to the black after posting losses for three consecutive years,” IndiaNivesh said.

The brokerage expects CSB Bank to embark on a growth trajectory of more than 20 percent on business and profitability for the next few years.

CSB Bank remains one of the oldest private sector banks in India, with a history of almost a century and a strong base in Kerala as well as a significant presence in Tamil Nadu and Karnataka. The bank is promoted by FIH Mauritius Investments Ltd (FIHM), a wholly-owned subsidiary of Fairfax India Holdings Corporation. The bank offers a variety of products and services to its customer base of 13 lakh (as on FY19) aided by 412 branches, with a focus on SME, retail and NRI customers.

CSB has 412 branches across 16 states and four union territories with an employee base of 3,001 as of FY19. The bank has healthy CASA deposits of around Rs 4,372 crore with CASA ratio of 28.2 percent as of September 30, 2019.

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