CSB Bank Shares Jump 54% On Stock Market Debut
Going forward, CSB Bank will focus on profitability metrics than gaining market share, CEO CVR Rajendran says after listing.
CSB Bank Ltd., backed by billionaire Prem Watsa, rose 54 percent in the best debut for an Indian lender since 2006.
The stock listed at Rs 275, 41 percent higher than the issue price of Rs 195 on the National Stock Exchange. Intraday, it rose as much as 57.43 percent but closed slightly lower at Rs 300.35. A total of 3.7 crore shares of the company traded on the NSE during the day. Its market capitalisation was Rs 5,205.41 crore.
Going forward, CSB Bank will focus on profitability metrics than gaining market share, Chief Executive Officer CVR Rajendran told BloombergQuint. “We are always a bottom line-focused bank and quality of the balance sheet is more important than quantity.”
Previously known as Catholic Syrian Bank, CSB Bank got bids for more than 1 billion shares versus the 11.55 million offered in the initial public offering in November—indicating 86.89 times subscription. The Kerala-based lender had to list by September, in line with the Reserve Bank of India’s regulations, but was delayed due to procedural issues. Axis Capital and IIFL Securities were lead managers to the issue.
Investors are lapping up fresh names in a sector battered by frauds and surging bad debt. AU Small Finance Bank, which debuted in 2017, surged more than 51 percent on its first trading day and is up 29 percent this year compared with a 13 percent gain in the benchmark index.
CSB Bank is “starting with a clean slate on a relative basis", Siddharth Purohit, analyst at SMC Global Securities in Mumbai, told Bloomberg. “A lot of small banks are struggling with asset quality issues, so part of the enthusiasm could be explained by the fact that there are very few options left in the small bank category.”
CSB Bank, in which Prem Watsa’s Fairfax Financial Holdings Ltd. had purchased a 51% stake in 2016, is one of India’s oldest private banks with a ninety-eight-year history. It has a strong base in Kerala and significant presence in Karnataka, Maharashtra and Tamil Nadu.
The bank primarily focuses on small businesses, retail and NRI customers and has four main areas of operations—SME banking, retail banking, wholesale banking and treasury operations. As on Sept. 30, CSB Bank had a network of 412 branches and 290 ATMs across 16 states and four union territories.
The lender caters to financial institutions, agriculture and allied businesses, and vendors and dealers of corporates under its SME banking segment. Under its retail banking business, it offers loan and deposit products to retail and NRI customers.
Watch | CEO CVR Rajendran On CSB Bank's Stock Market Debut