CSB Bank IPO fully subscribed on day 1

Receives bids for 1.20 crore shares

The initial public offer (IPO) of CSB Bank received bids for 1.20 crore shares today, 22 November 2019, as against 1.15 crore shares on offer, as per the National Stock Exchange of India (NSE) website data at 17:00 IST. The issue was subscribed 1.05 times.

The issue opened for bidding today, 22 November 2019 and it will close on Tuesday, 26 November 2019. The price band has been fixed at Rs 193 to Rs 195 per share.

Ahead of the opening of the IPO, the board of directors of the bank at its meeting held on 21 November 2019, finalised allocation of 94,54,080 equity shares to anchor investors at Rs 195 per share.

The IPO comprises of a fresh issue of Rs 24 crore and an offer for sale of 1.97 crore equity shares (including anchor portion of 94.54 lakh equity shares).

CSB Bank reported a net profit of Rs 44.27 crore on a net interest income of Rs 279.52 crore for the six months ended on 30 September 2019.

CSB Bank, earlier The Catholic Syrian Bank, is one of the oldest private sector banks in India with a history of over 98 years and a strong base in Kerala along with significant presence in Tamil Nadu, Karnataka, and Maharashtra with an overall customer base of 1.3 million end September 2019. The bank is primarily focused in the states of Kerala and Tamil Nadu.

The bank has a long operating history as a traditional bank, while its 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 new marquee investor - FIH Mauritius Investments (FIHM), which is a promoter of the bank.

FIHM, which is a wholly owned subsidiary of Fairfax India Holdings Corporation, has 50.09% shareholding in CSB Bank. The RBI granted its approval to FIHM to acquire up to 51% of the post-issue paid-up share capital of the bank, subject to certain conditions, including that the bank shall list its equity shares by 30 September 2019.

Total assets (gross) of the bank have increased from Rs 16128 crore end March 2017 to Rs 16911 crore end March 2019 and Rs 17756 crore end September 2019. The bank has substantially improved net interest margin from 2.11% in FY2017 to 2.80% in FY2019 primarily on account of reduction in cost of funds and increase in credit to deposit ratio, while the net interest margin has further jumped to 3.43% for H1 of FY2020.

Gross non-performing assets (NPAs) declined to 2.86% end September 2019 from 4.87% end March 2019 from 7.25% end March 2017. The net NPAs also declined to 1.96% end September 2019 from 2.27% end March 2019 and 4.12% end March 2017. Meanwhile, the provisioning coverage ratio has improved to 79.45% end September 2019. The bank has made total NPA provisioning of Rs 687 crore and total Write-offs including technical/prudential write offs of Rs 444 crore together amounting for Rs 1131 crore from FY2017 to FY2019.

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