After a blockbuster response to its IPO, CSB Bank shares listed at 41% premium to issue price on Wednesday morning.
After a blockbuster response to its IPO, CSB Bank shares listed at 41% premium to issue price on Wednesday morning. CSB Bank shares soared after making a debut to Rs 299 on NSE, or 54% higher as compared to the issue price of Rs 195. CSB Bank IPO had seen strong subscription across the segments. Retail investors bid for a total of 9.20 crore shares as against the 20.29 lakh shares reserved for them, implying a demand of more than 44 times. The non-institutional investors (NII) portion saw the highest demand, with thir portion being subscribed 165 times. The QIBs bid for a total of 39.18 crore, as against the 63 lakh shares reserved in this category, implying a subscription of 165 times. The IPO had concluded on November 29th.
Even as investors maybe mulling whether to continue to hold on to the stock, Umesh Mehta, Head of Research, Samco Securities noted that investors would be better off to book profits in entirety post listing gains. However, since the bank has in the past couple of years witnessed a turnaround because of the new management, investors can keep this stock on their watchlist and observe the fundamentals going forward, he said. “If the competitive nature of this sector is sustainable for CSB, then investors can consider it again in the future,” Mehta told Financial Express Online.
Mona Khetan, banking analyst, Reliance Securities advises investors to book profits, as the bank will take time to deliver even a 1% RoA amidst a weak operating environment, with higher exposure to the MSME segment. “It would be better to buy shares of other bank with more established RoA like a Federal, RBL and DCB, which trade at a discount to CSB Bank,” explained Khetan. According to Ajit Mishra, VP Research, Religare Broking, CSB Bank looks like a good bet from long-term perspective as it has good scope for growth going forward and investors may continue to hold some quantity.