SIB available at one-fourth its net-worth
KOCHI: The Thrissur-headquartered CSB Bank that listed its shares on December 4 on NSE and BSE with much fanfare has lost over half of its market value as the price nosedived from a peak of Rs313.50 as on December 6, 2019 to Rs150.25 when the market closed on Monday (March 09).
The loss in market value of CSB Bank in absolute terms during this period would sound more ruthless as Rs2618.98 crore was shaved off from its peak market value at Rs5439.23 crore.
Despite the heavy fall, CSB shares have managed to keep the market price above the book value, which is Rs104.48, unlike South Indian Bank (SIB) and Dhanlaxmi Bank whose share prices are just a fraction of their book value now.
It may be incomprehensible to learn why the shares of SIB, a bank with solid track record on profit-making, are being traded at about one-fourth of its book value (BV) of Rs28.16, whereas that of Dhanlaxmi was traded on Monday at less than half of its book value, which is Rs24.56.
The shares of the largest Kerala-headquartered bank, Federal Bank, though plunged about 19 per cent in a matter of one month – from Rs90.5 to Rs73.5, still maintains a level above its book value on the market.
While the market valuation of South Indian Bank (SIB) as of Monday has been computed at Rs1348.24 crore, that of Dhanlaxmi was a paltry Rs296.43 crore after the price fell by 22 per cent during the past one month alone, from Rs14.1o to Rs11.75.
The restructuring plans for the beleagured Yes Bank have triggered the rumour mill churn stories about the possibilities of similar developments in other weak South Indian banks too.
The shares of CSB Bank was listed at a premium of more than 40 per cent to the issue price of Rs 195 on the stock markets on December 4, as the stock made its debut at Rs 275 on BSE, Rs80 higher than the issue price in the IPO that took place in the last week of November.