Mumbai: Canadian investor Prem Watsa’s Indian bank has started preparations for a stock market listing this year, its chief executive said. Catholic Syrian Bank Ltd, in which Watsa’s Fairfax India Holdings Corp. received approval to take a controlling stake, is gearing up for a listing that may involve a ₹400 crore ($58 million) initial public offering (IPO), according to chief executive officer C.V.R. Rajendran.
Last year, Toronto-based Fairfax agreed to invest $168 million for a 51% stake in the bank, the first time the Reserve Bank of India (RBI) allowed a foreign firm to take a majority interest in a local lender. At the same time, the RBI told privately held Catholic Syrian Bank that it should list its shares before 30 September this year, according to Fairfax India’s latest annual report.
Catholic Syrian Bank has hired Axis Capital Ltd to manage the listing, and is debating exactly which route to market it will take, Rajendran said in a recent interview. He said he’s seeking approval from the Securities and Exchange Board of India (Sebi) for a direct listing—where all existing shares become tradable without the need for an initial public offering. But if the bank doesn’t get the nod from Sebi, he will instead pursue an IPO that may involve the sale of both new and existing shares, Rajendran added.
The listing of Catholic Syrian will attract many investors, said A. K. Prabhakar, head of research at IDBI Capital Market Services Ltd.
“Fairfax investment would have changed a lot of things at the bank, from the way it works to the way it reports."
Fairfax Financial Holdings Ltd owns assets around the world, with Watsa particularly enthused by opportunities in India. Since August 2015 he has invested about $1.6 billion in Indian assets, from chemicals manufacturers to financial services providers, according to the Fairfax annual report.