The CSB Bank's Rs 410 crore initial public offering (IPO) has got an overwhelming response from investors. Over 90 per cent shares were subscribed on the opening day. The shares are available at a price band of Rs 193-195 apiece in a lot size of 75 shares and its multiples.
The segment for retail investors was subscribed nearly 5 times, while the category for non-institutional investors received subscription of 7 per cent, reported Moneycontrol. The quote for qualified institutional buyers is yet to get subscription.
Kerala-based CSB Bank has already raised Rs 184.36 crore by issuing 94.54 lakh shares to 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 consists of fresh issue of 12.43 lakh shares amounting to Rs 24 crore and an offer for sale of 1.98 crore shares of Rs 10 each. The issue will close on November 26, 2019. The objective of the fresh issue is to augment bank's Tier-I capital base to meet its future capital requirements.
According to analyst at Geojit Financial Service, 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.
Brokerage firm Emkay said that the CSB Bank is going for the IPO mainly to meet the RBI's requirement of listing the bank. The Reserve Bank of India has directed the lender to list its shares on domestic exchanges after Prem Watsa's Fairfax India Holdings Corporation acquired 51 per cent stake in the bank for around Rs 440 crore. The bank's capital position has been strengthened post FIHM's investment in the bank.
Edited by Chitranjan Kumar