New Delhi, November 22: Kerala-based private sector lender CSB Bank will put up 21 million shares for sale from Friday, through an Initial Public Offering (IPO). The private sector lender plans to raise Rs 410 crore through the offer at the upper end of the price band by issuing fresh equity shares and offer for the sale of shares by existing shareholders. The price band for CSB Bank IPO has been fixed at Rs 193-195 per share.
The lender has issued 2.10 crore shares of Rs 10 each. Of the total issue size, 12.43 lakh shares amounting to Rs 24 crore will be part of the fresh issue. 1.98 crore shares of Rs 10 will be sold under the Offer For Sale (OFS) category. Axis Capital and IIFL Securities are the lead managers to the issue. CSB Bank shares will be listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).
The public offer of CSB Bank was oversubscribed by 5 pm. Against the IPO of 1.15 crore shares, the issue received around 1.19 crore bids till that time.
The bank posted a net loss of Rs 197.4 crore for the financial year 2018-19. However, for the six month period ended September 30, 2019, the bank's net profit after tax was Rs 44.27 crore. For fiscal ended March 31, 2019, the private sector lender's total advances stood at Rs 10,615 crore, while it had a deposit base of Rs 15,214 crore. It posted a net loss of Rs 65.68 crore for the March 2019 fiscal. In the previous fiscal, the lender posted a loss of Rs 127 crore.
CSB Bank has a strong base in Kerala along with a significant presence in Tamil Nadu, Karnataka, and Maharashtra. It has a customer base of 13 lakh, with a particular focus on SME, retail and NRI customers. Keeping its regional presence in mind it is trying to expand, and part of the plan was to rebrand itself to shed its regional perception. Further, a third of the bank’s loan book is towards SMEs.
The IPO is priced at Rs 193-195 per share. Analysts estimated that post-issue valuation works out to Rs 3,380 crores and peer banks such as South Indian Bank, Karur Vysya Bank, and even the larger Federal Bank are trading at cheaper multiples.
However, the bank's non-performing assets (NPAs) stood at Rs 240.68 crore for the financial year 2019, which represented 2.27 per cent of its net advances. The gross NPAs represented 4.87 per cent of total advances as on March 31, 2019