Thrissur-based old generation private lender CSB Bank — earlier known as Catholic Syrian Bank — which is coming out with an initial public offer, has set a price band of ₹193 to 195 per share thus valuing the lender at ₹3,400 crore. The IPO opens on November 22 and closes on November 26, 2019.
The IPO consists of fresh issue up to ₹24 crore and an offer for sale of up to 19,778,298 equity shares.
Three insurance companies — HDFC Life, ICICI Prudential and Edelweiss Tokyo Life Insurance Company, which has stake in the bank — will exit following the IPO. The Book Running Lead Managers to the offer are Axis Capital Limited and IIFL Securities Limited.
Indo-Canadian billionaire businessman Prem Watsa’s Fairfax India which has 50.09% stake in the bank will see its stake falling from 49.74% post the IPO, CVR Rajendran, MD & CEO of CSB Bank told reporters at a press conference to announce the IPO.
The Reserve Bank of India (RBI) has given promoters a 15 year time period to reduce stake to 15%. Promoters will have 5 years to reduce stake to 40%, 10 years to reduce stake to 30% and 15 years for bringing down stake to 15%.
The bank is going for the IPO mainly to meet regulatory requirement. RBI had asked the lender to list by September but there was a delay by couple of months due to procedural issues.
The bank reported ₹44 crore profit for the half year ended September 2019 as compared with a ₹197 crore loss for the full financial year 2018-19.
While the loan book of the bank is at ₹11,500 crore its deposit base is ₹15,000 crore. Mr Rajendran said the bank is going slow on deposits as the bank has surplus liquidity. However, the bank will continue to focus on gaining current and savings account deposits which will help the net interest margins.
The bank’s management said the focus on the bank on the lending side will continue to be gold loans. Such loans are 33% of the total loan book. The retail loan book of the bank is 47% of total, while the wholesale book is 25%. The SME portfolio is 30% of the loan book.
Of the total deposits, 25% are NRI deposits, Mr Rajendran said.
CSB Bank a strong base in Kerala along with significant presence in Tamil Nadu, Karnataka, and Maharashtra with customer base of 1.3 million as on March 31, 2019. The bank plans to add 425 branches over the next five years.
