Kerala-based CSB Bank's initial public offering, which was fully subscribed on the first day of bidding on Friday, received 1.7 times subscription in early hours on Monday. The IPO received bids for 1.98 crore shares against the total issue size of 1.15 crore shares (excluding anchor book), reflecting 1.7 times subscription, as per data available with the National Stock Exchange.
On Friday, the category reserved for retail investors was subscribed 5.60 times, while that for non-institutional investors was subscribed just 10 per cent as it failed to attract institutional investors. Qualified institutional buyers are yet to get subscription.
Formerly Catholic Syrian Bank, the private sector lender aims to raise up to Rs 410 crore through IPO. The shares are available at a price band of Rs 193-195 apiece in a lot size of 75 shares and its multiples.
The lender has already garnered Rs 184.36 crore from anchor investors ahead of IPO, at upper end of price band of Rs 193-195 per share. The bank has allotted 94,54,080 shares to 24 anchor investors, including ICICI Prudential MF, SBI, Aditya Birla Sun Life Trustee, Axis MF, Sundaram, HSBC and Edelweiss.
The IPO, which will close on 26 November, consists of fresh issue of 12.43 lakh shares worth Rs 24 crore and an offer for sale of 1.98 crore shares of Rs 10 each. The objective of the fresh issue is to augment bank's Tier-I capital base to meet its future capital requirements.
Axis Capital and IIFL Securities are the lead managers to the issue. CSB Bank shares will be listed on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).
Motilal Oswal Financial Services believes that investor can Subscribe to the IPO as the company is focused to improve profitability and growth going ahead. "Post the acquisition by Fairfax group, the realigned operational strategy has helped the company to report profits in H1FY20. The company is focused to improve profitability and growth going ahead. We believe that given the strong promoter backing and turnaround in profitability, investor can Subscribe to the IPO for listing gains, said Motilal Oswal Financial Services.
Meanwhile, Angel Broking has maintained neutral on the IPO as it believes that valuations are expensive. Analyst at Geojit Financial Service also opined that the price band of the offer looks ambitious. "Some PSU banks and medium sized private sector banks are available in the secondary market at attractive valuations," said VK Vijaykumar, Chief Investment Strategist at Geojit Financial Service.
Edited by Chitranjan Kumar