CSB Bank IPO price band set at Rs 193-195, to raise Rs 410 crore

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Mumbai | Updated: Nov 19, 2019 6:19 PM

The offer involves a fresh issue of shares of face value Rs 10 each to raise up to Rs 24 crore, and an offer for sale (OFS) of 1.97 crore shares by existing investors through which it will sell Rs 385 crore of scrips.

Bank IPO, CSB Bank, CSB Bank IPO, initial public offering, Catholic Syrian BankThe bank has priced the sale of shares at Rs 193-195 per piece and the issue will be open between November 22-26.

Kerala-based CSB Bank (formerly Catholic Syrian Bank) on Tuesday announced a public issue of shares to comply with RBI mandate to list, in which stock of up to Rs 410 crore will be sold. The offer involves a fresh issue of shares of face value Rs 10 each to raise up to Rs 24 crore, and an offer for sale (OFS) of 1.97 crore shares by existing investors through which it will sell Rs 385 crore of scrips. The bank has priced the sale of shares at Rs 193-195 per piece and the issue will be open between November 22-26.

Managing director and chief executive CVR Rajendran said three insurance companies, including HDFC Life, Reliance Nippon Life Insurance and ICICI Prudential are exiting their collective stake of around 6 per cent, while Federal Bank is also exiting by selling a residual 1.68 per cent stake. As the fresh issue component is relatively smaller, its promoter entity Fairfax India Holdings Corporation’s stake will go down to 49.73 per cent from the present 50.09 per cent.

Rajendran said the promoter entity, which acquired 51 per cent in the bank in February this year, has five years to reduce holding to 40 per cent and 15 years to go down to 15 per cent in compliance with RBI requirements. As part of the same requirements, it had to list by September 2019 and Rajendran said some procedural aspects resulted in a marginal delay.

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At the upper end of the band, it will be raising Rs 410 crore through the issue, including the Rs 24 crore in fresh issue and the rest in OFS. Rajendran said the bank will continue to focus on its mainstay of gold loans that form 33 per cent of the book, and is also aspiring to go deeper into the small business lending by spinning it as a different vertical.

It is also targeting to reduce the share of the corporate loans to 15 per cent from the present 25 per cent, he told reporters here. From an asset quality perspective, Rajendran said loans due for between 31-89 days stands at Rs 160 crore at present, and includes only one account from the corporate segment to a stressed shadow bank.

The bank has returned to the black with a profit of Rs 44 crore for the first half of the fiscal, he said. It is targeting to open 425 new branches in the coming time, with a focus on south excluding Kerala and also the western regions, he said.

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