Kerala-based private sector lender CSB Bank, formerly The Catholic Syrian Bank, is planning to launch its initial public offering (IPO) in November, said two people aware of the development, requesting anonymity.
Last year, Canadian billionaire Prem Watsa’s Fairfax India Holdings Corp. had acquired a 51% stake in CSB Bank for around $168 million. In a first-of-its-kind approval to help turn around a lender, the Reserve Bank of India had allowed a foreign investment firm to invest in a homegrown bank.
“The bank will start its marketing efforts and investor roadshows from next week. They are planning to launch the IPO in November. Work on the draft red herring prospectus is going on. The specific timelines for the November launch will be decided after factoring in the response received during the roadshows," said the first person. CSB is trying to mop up ₹500 crore through the initial share sale, he added. The bank received market regulator Sebi’s approval for its IPO on Monday.
An email sent to CSB Bank on Wednesday remained unanswered. The bank, according to its draft prospectus, is looking to raise ₹30 crore via fresh issue of shares to increase its tier-1 capital base and to meet future capital requirements, while its existing shareholders will sell 1.97 crore share through the offer-for-sale route. ICICI Lombard General Insurance, HDFC Life Insurance, ICICI Prudential Life Insurance, Federal Bank and Bridge India Fund are expected to sell their stakes, partially or fully, during the IPO.
Investment banks Axis Capital and IIFL Securities are managing the CSB Bank IPO. This is the second attempt at a public listing by the bank. In March 2015, it had filed a draft prospectus to raise ₹400 crore. However, the bank never went ahead with its public offering. The 98-year old bank is one of the oldest private lenders in India with a strong base in Kerala, and significant presence in Tamil Nadu, Maharashtra and Karnataka. Its customer base is 1.3 million as on 31 March. It primarily lends to small and medium enterprises, retail, and non-resident Indians.