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CSB Bank hits lowest level since listing; tanks 30% from December high

CSB Bank had made a strong debut at the bourses, soaring 54 per cent over its issue price of Rs 195 at Rs 300.

SI Reporter  |  Mumbai 

CSB Bank hits lowest level since listing; tanks 30% from December high

Shares of (formerly known as Catholic Syrian Bank) were trading lower for the seventh straight day, down 3 per cent at Rs 210, on the BSE on Wednesday. The Kerala-based bank was trading at its lowest level since its listing on December 4, 2019.

had made a strong debut at the bourses, soaring 54 per cent over its issue price of Rs 195 at Rs 300. The stock has erased almost all its listing gain, and is now trading 8 per cent higher against the issue price.

In the past seven trading days, the stock has slipped 13 per cent, as compared to a per cent decline in the S&P BSE Sensex. With today’s fall, the market price of has tanked 33 per cent from its life-time high of Rs 314 touched on second day of a listing.

The last few years have been transformational for the bank with declining influence of trade union, sharp improvement in capital position and strengthening balance sheet and profitability. The bank’s performance has not been encouraging in the past with rise in NPA level. After struggling for many years due to lack of capital, the bank has gradually been coming out of trouble backed by fund infusion from Fairfax group.

The Bank’s IPO was mainly due to the Reserve Bank of India’s (RBI) regulatory requirement, as per which Fairfax India Holdings Corporation (FIHC) is required to reduce stake to 40 per cent in five years, 30 per cent in 10 years and 15 per cent in 15 years.

“With Fairfax infusing capital to the tune of Rs 1,208 crore, the capital adequacy ratio (CAR) of the bank has gone up to 22.7 per cent. Maintaining the current loan mix, the bank’s capital is enough to meet its growth for the next 3-5 years and it may not have to dilute equity," analysts at SMC Global Securities had said in an IPO note.

However, Mona Khetan, Banking Analyst, Reliance Securities believes, the bank will take time to deliver even a 1 per cent RoA amidst a weak operating environment, with higher exposure to the MSME segment.

Post listings, Veteran investment banker Vallabh Bhanshali, chairman of Enam group, non-resident Indians - Yusuffali Musaliam Veettil Abdul Kader, Satpal Khattar, Lal Arakulath Sankappa and Zafar Ahmadullah – have holding stake in the range of 1 per cent to 2 per cent in CSB Bank, according to shareholding pattern disclosed by the bank.

First Published: Wed, January 01 2020. 10:32 IST
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