Thrissur-based old generation private lender CSB Bank — earlier known as Catholic Syrian Bank — has set a price band of ₹193-195 per share for its initial public offer (IPO), valuing the bank at ₹3,400 crore. The IPO opens on November 22 and closes on November 26.
The IPO consists of fresh issue up to ₹24 crore and an offer for sale of up to 1,97,78,298 equity shares.
Three insurance companies — HDFC Life, ICICI Prudential and Edelweiss Tokyo Life Insurance Company, which have 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 to 49.74% post the IPO, C.V.R. Rajendran, MD & CEO, CSB Bank, told reporters.
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 it down to 15%. The bank is going for the IPO mainly to meet regulatory requirements.
RBI had asked the lender to list by September but there was a delay 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, 25% of which is from NRIs. Mr. Rajendran said the bank was going slow on deposits as the bank had surplus liquidity.
CSB Bank has 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.
