CSB Bank IPO oversubscribed 35 times

To be the 3rd listed bank from Thrissur and 4th from Kerala

KOCHI: The Rs410-crore Thrissur-headquartered CSB Bank’s public issue closed on Tuesday (November 26, 2019) marking an overwhelming response from all categories of investors leading to an oversubscription of 35.25 times, according to data provided by National Stock Exchange (NSE).

CSB Bank shares will be listed on both BSE and NSE. The tentative date for share allotment finalisation is likely to be December 02, 2019 and listing will likley take place on December 4, 2019, according to brokerages.

Axis Capital and IIFL Securities managed the issue of CSB Bank, which will be the fourth bank from Kerala to be listed on a stock market after Federal Bank, South Indian Bank (SIB) and Dhanlaxmi Bank.

Listing of shares within a period of one year was one of the conditions laid out by Reserve Bank of India (RBI) for allowing Fairfax India Holding (FIHM) to buy a majority stake in CSB Bank, formerly Catholic Syrian Bank, about an year ago.

The CSB Bank IPO that was launched on November 22 with a price band of Rs193-Rs195 a piece, and closed on November 26, received bids for 40.73 crore shares in total against an issue size of 1.16 crore shares, excluding the shares bought by anchor investors a day before the IPO kicked off.

Interestingly, the biggest response came from qualified institutional buyers (QIB), an investor category that hesitated to open account on the first day of the issue, with an oversubscription of about 39 times, and from the non-institutional investors’ category, which was oversubscribed by a whopping 45.49 times.

The retail investor category, which started off with the highest subscription level on the first day of the issue, closed as the poorest performer though with an oversubscription of 9.07 times.

Almost 94 per cent of the size of the Rs410 cr public issue was made up of offer for sale (OFS) shares from the existing shareholders including reputed financial institutions such as Kerala’s largest bank, Federal Bank, with only Rs24 crore being the size of the fresh issue.

Post IPO, the holding of its promoter entity, Fairfax India Holdings Corporation, will be reduced to 49.73 per cent from the present 50.09 per cent. The RBI regulations stipulate that the promoter has to reduce its stake to 40 per cent in five years, thereafter to 30 per cent in 10 years and 15 per cent in 15 years.

 

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