InvestorQ : Should I subscribe to the new IPO CSB Bank Ltd?
Niti Shenoi made post

Should I subscribe to the new IPO CSB Bank Ltd?

Roshni Hegde answered.
2 years ago
To get with the answer of subscribing the IPO or not, let me pen down key points of CSB Bank first, below are according to my research and knowledge;

About IPO-
Initial public offering (IPO) of CSB Bank will open on 22nd November 2019, Friday. The total worth of the IPO is Rs. 410 crore. CSB Bank is amongst the oldest private sector banks in India founded in 1920. The IPO price band has been set at Rs 193-195 per share. The issue will close on 26th November 2019.

About CSB Bank-
CSB has reported total income around Rs. 1,617.50, crore Rs 1,422.27 crore and Rs 1,483.43 crore in FY17, in FY18 and in FY19 respectively. It incurred a net loss of Rs 57.99 crore, Rs 127.09 crore and Rs 65.69 crore, respectively, as per the aligned FYs.

Market expert's views- The issue price is aggressive. Experts think the bank is planning to list only to meet the RBI’s requirement of listing the bank. As per the observations,
The bank has witnessed a continues to decrease in the GNPA ratio.

Risk factors- Concentration of business of the bank has been seen in Southern India, especially Kerala. Thus, if Kerala face any adverse change in the economic, political or geographical conditions or other states in southern India, it may show an impact on the bank’s results of operations.

My conclusion- The have noticed a consistency of bank of growth and improvement in the asset quality and turnaround performance in current FY. I think the stock can play well only in the long run investment. I went through the bank portfolio, over 60% of it is covered with SME and secured gold ornaments; it is quite a safe option. Thus, I foresee the bank to come up with a better return on equity (RoE). I would thumb up to the subscription of this IPO.


Moii Chavate answered.
2 years ago
Today, on November 26th was the last day for bidding CSB Bank IPO. The result of IPO worth Rs 410-crore reached expert's expectation by getting positive responses from investors of all categories. The public issue of private sector lender got over 86.73 times subscription and bids for almost 100.22 crore equity shares against its issue size of 1.15 crore shares. The overwhelming response was expected since day one, as retailers subscribed actively as their reserved portion of 10% was oversubscribed 43.48 times. While non-institutional investors were subscribed to 164.68 times and that of qualified institutional buyers by 62.18 times.