Incorporated in 1920, Kerala based CSB Bank Ltd, formerly known as Catholic Syrian Bank, is one of the oldest private sector banks in India. The bank has a significant presence in Kerala, Karnataka, Tamil Nadu and Maharashtra. CSB Bank Ltd has four business areas, which are:
1. SME Banking:
Under SME Banking, the bank offers banking services to vendors, allied businesses, agriculture, financial institutions, and dealers of corporates. The products offered to this category include working capital loans, letters of credit, term loans, bank guarantees and invoice/bill discounting.
2. Wholesale Banking:
CSB Bank fulfils business needs of large & mid-size corporates, and business entities of Rs 250 million and more credit requirement under Wholesale Banking category.
3. Retail Banking:
Under the Retail Banking category, the bank offers retail lending and deposit products to retail and NRI customers. The lending products include vehicle loans, gold loans, loans against properties, education loans, agricultural loans, personal loans and housing loans to retail and NRI customers. The deposit products include corporate salary accounts, recurring deposits, savings accounts, current accounts, and fixed deposits.
4. Treasury Operations:
Under Treasury Operations, the bank deals with asset-liability management, statutory reserves management, trading & investment of securities, foreign exchange, and liquidity management activities. This category is aimed to maintain liquidity requirement to comply with the CRR (Cash Reserve Ratio) and SLR (Statutory Liquidity Ratio), which are RBI Mandates.
The company also has a contractual arrangement to distribute life insurance products of HDFC, Edelweiss Tokio, and ICICI Prudential Life Insurance Company Ltd and general insurance products of Reliance General Insurance Company Ltd.
The bank has 1.3 million customers, which are majorly from Retail, SME and NRI segments. It has a wide product and services range which are delivered through multiple channels such as 277 ATMs, 414 branches and other micro ATMs, internet banking, debit cards, mobile banking, UPI and POS (Point of Sale). CSB Bank has a presence across 16 states and 4 UTs (Union Territories).
Note: All the information as on 31st March 2019.
In the year 2018, Watsa's Fairfax India Holdings (FIH) Corporation has acquired CSB Bank with 51% stake (around Rs 440 cr). Currently, the bank is focussing on a new business model to work as a full-service new age private sector bank with the help of its promoter, FIH Mauritius Investments Ltd (FIHM).
- Strong network and well-known brand in South India
- Significant capital base
- Established SME business model
- Major portion of gold loans in portfolio
- Prudent risk management controls, policies, and procedures
- Increase in NPA may impact earnings
- Managing asset quality in given current stressed scenario particularly in corporate/SME portfolio
- Volatility in gold prices may impact financials
- Promoter Fairfax (FIHM) will have to dilute 50.1% stake to 15% over the coming 15 years which may create an overhang in the long term
| Purpose | Amount (₹ Cr) |
|---|---|
| 1 To augment our Bank’s Tier-I capital base to meet our Bank’s future capital requirement | — |
| Metric | 30-Sep-19 | 31-Mar-19 | 31-Mar-18 |
|---|---|---|---|
| Total Assets | 17,323 | 16,453 | 15,335 |
| Revenue | 817 | 1,483 | 1,422 |
| PAT | 44 | 66 | 127 |
| Category | Sub (x) | Offered | Bid For |
|---|---|---|---|
| QIB | — | 15,756,801 (75%) | — |
| NII / HNI | — | 3,151,360 (15%) | — |
| Retail (RII) | — | 2,100,906 (10%) | — |
| Total | — | 21,009,067 (100%) | — |
* Amount calculated at upper price band (₹195) · ** Total includes all investor categories
- 1 Initiation of Refund 03 Dec 2019
- 2 Credit of Shares to Demat 03 Dec 2019
- 3 Lock-in Period (30%) January 1, 2020
- 4 Lock-in Period (50%) March 1, 2020
- Retail allocation is weak at 10% of the total offering.
- HNI/NII demand is good at 15%.
- Institutional (QIB) interest is strong at 75%.
This IPO has relatively lower interest or stretched valuation. Proceed with thorough research and caution.
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