CSB IPO Review: Experts Analysis- CSB Bank IPO

CSB IPO Review: Experts Analysis- CSB Bank IPO

CSB Public Offer May Offer Double Returns 

CSB Bank is planning to launch its initial public offering on Friday. The issue comprises a fresh issue and offers for sale. The primary aim of the issue to provide fresh capital requirements and offer an exit to the PE investors. The IPO will close for subscription on 26th November 2019. The shares of CSB will list on National Stock Exchange and Bombay Stock Exchange. Investors will check the CSB IPO Review before making investments.

History Of CSB Bank

CSB is formally known as the Catholic Syrian Bank. It is the oldest private sector bank in India. It was located in Kerala. CSB operations commenced in January 1921. The firm operates with a base of 1.3 million customers along with credit portfolio, agriculture, MSMEs, education, and housing loans. Catholic Syrian Bank has been controlling by Prem Wasta’s Fairfax.

Last year, Fairfax had bought 51 percent of stake in CSB, said by a source. The remaining stake held by ICICILGI, HDFCLI, ICICI Prudential Life, The Federal Bank, Way2Wealth Securities, and Edelweiss Tokio Life Insurance. At the end of September 2019, CSB has maintained 430 branches and 240 ATMs. CSB controlled these under eight zonal offices.

Business Model:

Catholic bank has a unique business model. It operated its business in four segments such as SME banking, Retail, Wholesale, and Treasury Operations.

Financial Status Of CSB

As of 31 March 2017, the has posted an operating profit of Rs 151.71 crore and a net profit of Rs 1.55 crore against operating loss of Rs 3.75 crore and a net loss of Rs 149.72 crore in fiscal 2015-2016. At the same time, the total assets of CSB increased by Rs 571.30 crore.

According to the reports, in fiscal 2017-2018, the bank has observed a profit of Rs 74.33 crore and a net loss of Rs 97.47 crore against Rs 151.71 crore and a net profit of 1.55 crore in fiscal 2016-2017. The total assets stood at Rs 15870.05 crore. The assets decreased by Rs 353.18 crore compared to the previous year.

In fiscal 2018-2019, CSB reported a profit of Rs 13.36 crore and a net loss of Rs 197.42 crore. As of March 31, 2019, total assets stood at Rs 16911.16 crore which was increased by Rs 1041.11 crore.

CSB IPO Details – CSB IPO Review

CSB IPO is a book built type issue. It offers a total of 21,021,821 equity shares aggregating up to Rs 409.68 crore. The issue comprises a fresh issue of 1,243,523 equity shares worth of Rs 24 crore and an offer for sale of 19,778,298 shares worth of Rs 385.68 crore at a face of Rs 10 per equity share.

The price of the issue set between Rs 193-195 per equity share. The minimum order quantity and market lot set at 75 shares each.

Total of shares up to 75 percent of the issue reserved for qualified institutional investors, 15% to NII and 10% to retail investors.

Experts View – Should You Invest?

As of the financial statements of CSB, the public offer is aggressively priced. The issue size and price band may attract investors to pick this offer. Currently, peer companies of CSB perform at lower. As of the draft papers, total loans of CSB up to 31 percent of loans approved under Gold loans.

According to reports, CSB stock becomes a good stock as a long-term aspect. The fund investment experts said that they will expect a better return on equity report from the bank. Moreover, the bank will improve its operations and income. 

CSB is responsible for financial performance and asset quality. At present, the bank is on crossroads and witnessing no fancy. However, investment experts suggest that investors may consider investments at their own risk. 

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