CSB Bank IPO

CSB BANK LIMITED IPO

CSB Bank is one of the oldest private sector banks in India with a history of over 98 years and has a strong base in Kerala along with a significant presence in Tamil Nadu, Karnataka, and Maharashtra.

The bank offers a wide range of products and services to its overall customer base of 1.3 million as of 31 March 2019, with a particular focus on SME, Retail, and NRI customers.

CSB Bank delivers its products and services through multiple channels, including 414 branches (excluding three service branches and two asset recovery branches) and 277 ATMs spread across 16 states and four union territories as on 31 March 2019.

 

The bank has four principal business areas, namely, (a) SME banking, (b) retail banking, (c) wholesale banking, and (d) treasury operations.  It is in the process of rebranding itself to “CSB Bank Limited” and is re-aligning its organizational set-up for efficiently driving operations and business strategy. Under this strategy, branches will be responsible only for deposits, cross-selling and customer servicing and all loan products will be driven by dedicated teams, with each business team operating as a profit center.

 

  1. SME Banking:

Under SME Banking, the bank offers banking services to vendors, allied businesses, agriculture, financial institutions, and dealers of corporates. The products offered to this category include working capital loans, letters of credit, term loans, bank guarantees and invoice/bill discounting.

 

  1. Wholesale Banking:

CSB Bank fulfills the business needs of large & mid-size corporates, and business entities of Rs 250 million and more credit requirements under the Wholesale Banking category.

 

  1. Retail Banking:

Under the Retail Banking category, the bank offers retail lending and deposit products to retail and NRI customers. The lending products include vehicle loans, gold loans, loans against properties, education loans, agricultural loans, personal loans and housing loans to retail and NRI customers. The deposit products include corporate salary accounts, recurring deposits, savings accounts, current accounts, and fixed deposits.

 

  1. Treasury Operations:

Under Treasury Operations, the bank deals with asset-liability management, statutory reserves management, trading & investment of securities, foreign exchange, and liquidity management activities. This category is aimed to maintain liquidity requirements to comply with the CRR (Cash Reserve Ratio) and SLR (Statutory Liquidity Ratio), which are RBI Mandates.

 

The company also has a contractual arrangement to distribute life insurance products of HDFC, Edelweiss Tokio, and ICICI Prudential Life Insurance Company Ltd and general insurance products of Reliance General Insurance Company Ltd.

Strength of CSB BANK

1) One of the most reputed banks of South India and a strong network presence in all parts of India. 

2) Gross Non-performing assets (NPA) were 2.86% of its total advances, as of March 31 2019 declining from 4.87 %

3) The Bank will continue to focus on its mainstream business of gold loans. (33% of the book)  

CSB BANK IPO Details

IPO Opens on:  22 November 2019

IPO Closes on:  26 November 2019

Price Band:  Rs 193 -195 per share

Bid Lot: 75 shares and in multiples of 75 shares

Maximum Price: Rs 14,625

Fresh issue: Rs 24 Cr

Offer for Sale: Rs 381.72 – 385.68 Cr

IPO Size: Rs 409.65 Cr

Retail & Employees Discount: Rs 0 per share

CSB BANK IPO Time Line

Finalisation of Allotment: 2 December 2019

Initiation of Refunds: 3 December 2019

Transfer of Shares to Demat Account: 3 December 2019

Listing At: NSE & BSE

Listing Date: 4 December 2019

Financial Performance of (in Crores) CSB BANK LTD.

H1 FY20 FY19 FY18
Total Revenue 816.7 1,483.4 1,422.2
Total Expense 713.1 1,470.1 1,347.9
Net Income 44.3 -65.7 -127.1
Net margin (%) 5.4 -4.4 -8.9

CSB BANK IPO Valuations

Face Value = Rs 10

Earnings Per Share (EPS) = Rs -3.81

PE Ratio = NA

Return on Net Worth (RONW) = -4.48%

Net Asset Value = Rs 85.12 per share

CSB BANK IPO Subscription Details

Category Shares offered Subscription (no. of times, at 6 pm)
Day 1 Day 2 Day 3

QIB

6,302,721 0x 0.25 62.18
NII 3,151,360 0.1x 1.06 164.67
Retail 2,100,906 5.60x 21.52 43.87
Employee 0 0 0 0
Total 11,554,987 1.05x 4.34 86.90

Grey Market Premium of CSB BANK IPO Day by Day

Grey market premium as on 26-11-2019 = Rs. 70-75/Share

Grey market premium as on 25-11-2019 = Rs. 70-75/Share

Grey market premium as on 24-11-2019 = Rs. 70-75/Share

Grey market premium as on 23-11-2019 = Rs. 65-70/Share

Grey market premium as on 22-11-2019 = Rs. 65-70/Share

Grey market premium as on 21-11-2019 = Rs. 65-70/Share

Grey market premium as on 20-11-2019 = Rs. 45-50/Share

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