CSB Bank IPO – Should you apply to the IPO? Checkout.

CSB Bank IPO review

CSB Bank IPO Issue Details:

IPO date:                      22 Nov – 26 November 2019
Issue Size:                    400 Cr (*around)
Offer Price:                  Rs 193 – Rs 195 Per Equity Share
Market Lot:                  75 Shares & multiples
Exchange Listing:       BSE, NSE

IPO Timelines (tentative dates):

Allotment & refund:    03 Dec
Credit to Demat:           03 Dec
Listing on Exchange:   04 December

Company Promoters: FIH Mauritius Investments Ltd (“FIHM”)

Objective of the Issue: Bank’s future capital requirements

IPO Registrar: Link InTime India Pvt Ltd

Company Overview:

  • Kerala based CSB bank formerly known as Catholic Syrian Bank is one of the oldest private sector banks in India (almost 100 years old bank).
  • Presence in Kerala, Maharashtra, Tamil Nadu and Karnataka (more than 60% in Kerala only)
  • business areas – Major portion of gold loans in portfolio. Operation in SME Banking, Wholesale Banking, Retail Banking, Treasury Operations 
  • The company website: https://www.csb.co.in/

CSB Bank IPO Analysis (Review):

Financial Performance:

financial performance CSB Bank IPO

Net NPA (Non performing Assets):

year 2017 – 4.12%
year 2018 – 2.87%
year 2019 – 2.27%

Company Strength:

  • The net NPAs decreased to 2.27% from 4.12%
  • Retail offering driven by strong gold loan portfolio
  • The bank income might turn positive for this year as per Bank Management statements.

Company Risks:

  • Net losses from business in last 3-4 years due to high NPA.
  • Recent Kerala flood may impact the Bank income in terms of earnings & NPA.

Analysis Conclusion:

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  • Decreasing NPA, major gold portfolio are plus while Net losses in last few years, recent Kerala flood are key risks.
  • GMP (Grey Market Premium) is around 80 Rs as of 15th Nov. But the GMP is doubtful whether manipulative or real in this case.
  • Considering all factors, my personal view is ‘neutral for listing gain, I recommend you to watch QIB & NII subscription response till 1 pm (last day) & based on figures take the decision on market response/sentiment.

BullRun IPO-India Ratings:  2.5 stars (out of 5 Stars)

CSB Bank Analysis video link: https://youtu.be/02lhIu35d2Q

CSB Bank IPO Allotment Check:

CSB Bank Subscription Status:

CSB Bank IPO Subscription figures

Abbreviations:

EPS – Earning per share
OFS – Offer for Sale
P/E – Price to Earning
RoE – Return on Equity
QIB – Qualified Institutional Buyer
NII – Non-Institutional Investors
RII – Retail Individual Investor

Disclaimer & Conflict of Interest:

The above analysis is based on research of the company and RHP of CSB Bank. You should study more before taking any decision.

Analysis by –  NISM Certified Research Analyst & Investment Advisor.

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