CSB Bank IPO fully subscribed on first day on heavy demand from retail investors

CSB Bank IPO got fully subscribed on the first day of the issue backed by heavy demand from retail investors. The issue received bids for a total of 1.19 crore shares as against the issue size of 1.15 crore implying, implying a 104% subscription. Retail investors bid for a total of 1.16 crore shares as against the 20.29 lakh shares reserved for them, impying a demand of more than 5 times. The non-institutional investors (NII) portion was subscribed about 10% of the portion reserved for them.

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Formerly known the Catholic Syrian Bank, the private sector lender looks to raise up to Rs 410 crore from its IPO. Kerala-based CSB Bank’s IPO is being carried out to meet RBI’s reglulation with regard to listing. The public offer contains a fresh issue of shares 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 worth shares.

CSB Bank IPO will remain open till November 26th, Tuesday. CSB Bank has fixed the price band as Rs 193- Rs 195 per share. Investors can pick up shares in lots of 75 equity shares, and in multiples of 75 equity shares thereafter. The bank is set to  finalise basis of allotment on December 2 and will credit equity shares to shareholders’ DP accounts on December 3, Axis Capital said in its recent note.

According to brokerage firm Motilal Oswal, the issue may list at a premium. “At the upper price band, the issue is valued at 2.4x P/B on 1HFY20 post issue diluted basis. Post the acquisition by Fairfax group, the realigned operational strategy has helped the company to report profits in 1HFY20. 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,” Motilal Oswal said in a report.

(Please consult your financial advisor before taking any investment-related decision)