CSB Bank’s IPO Marked by Whopping Oversubscription
Registering bids for more than 100 crore shares, CSB Bank’s IPO with an original issue of 1.15 crore shares was oversubscribed by 87 times
Mumbai: Ahead of getting listed on the bourses, the Initial Public Offering (IPO) by CSB Bank, formerly known as Catholic Syrian Bank, was oversubscribed by a whopping 87 times, indicating a possible jumpstart for the bank in the stock market which has been relatively bearish against the backdrop of reported economic slowdown.
CSB Bank’s IPO, which was kept open for subscription between November 22 and 26, witnessed long bidding queues of High Net worth Investors (HNWIs) and Qualified Institutional Buyers (QIBs) during the period. While the IPO received bids for over 100 crore shares, the original issue of shares were only 1.15 crore. The Bank’s Rs. 410-crore IPO was open for bidding at a price band of Rs. 193 to Rs.195.
According to latest reports, the category reserved for retail individual investors was subscribed 44.25 times, QIB’s 62.18 times and non-institutional investors 164.68 times.
The Rs. 410-crore offer involved a fresh issue of shares of face value
Rs. 10 each to raise up to Rs. 24 crore, and an offer for sale (OFS) of 1.97 crore shares by existing investors through which it will sell Rs. 385 crore of shares.
The net proceeds from the Offer are proposed to be utilised to augment Tier-I capital base to meet Bank’s future capital requirements which are expected to arise out of growth in the Bank’s assets, primarily loans/advances and investment portfolio and to ensure compliance with Basel III and other RBI guidelines.
According to the Bank, the Investor Portion shall be reserved for domestic Mutual Funds, subject to valid bids received from the domestic Mutual Funds at or above the Anchor Investor Allocation Price. Five per cent of the QIB Portion (excluding the Anchor Investor Portion) shall be available for allocation on a proportionate basis to Mutual Funds only. The remainder of the QIB Portion shall be available for allocation on a proportionate basis to all QIB Bidders (other than Anchor Investors), including Mutual Funds.
CSB Bank noted in an official statement that not more than 15 per cent of the offer shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not more than 10 per cent of the offer shall be made available for allocation to Retail Individual Bidders in accordance with the SEBI ICDR Regulations.
CSB Bank Limited 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 significant presence in Tamil Nadu, Karnataka and Maharashtra. The bank offers a wide range of products and services to their overall customer base of 1.3 million as on September 30, with particular focus on SME, Retail and NRI customers. It delivers products and services through multiple channels, including 412 branches and 290 ATMs spread across 16 states and four union territories.