Catholic Syrian Bank, which is majority owned by India-born Canadian billionaire Prem Watsa’s Fairfax India Holdings Corp, is looking to go public either via a direct listing or a maiden share sale, its chief executive said.
CVR Rajendran told VCCircle the Kerala-based lender is seeking approval from the capital markets regulator Securities and Exchange Board of India (SEBI) for a direct listing. The process allows a company that fulfills SEBI’s eligibility criteria to list its shares on the stock exchanges without any public offering.
The bank, which twice attempted an initial public offering previously, is also preparing for a Rs 400-crore share sale if it does not get approval to directly list its shares, Rajendran said.
Bloomberg News, which first reported the development, said the bank has hired Axis Capital to manage the listing.
Fairfax had acquired a 51% stake in the bank in February 2018. This was the first instance of a foreign company buying a majority stake in an Indian bank. India has been keen to attract foreign investment into banks and eased some ownership rules in early 2016 to attract more buyers. Under current norms, a foreign investor can own a stake of up to 74% in private-sector banks.
Besides Fairfax, Catholic Syrian Bank was also in talks with the Asian Development Bank, after it deferred plans to go public due to market volatility. Its other PE investors include AIF Capital and Siguler Guff.
The bank lends to small and medium enterprises (SME), retail customers and non-resident Indians. It has four principal businesses: SME banking, retail banking, corporate banking and treasury operations, its website shows. It has taken various initiatives in the past few years to reinvent itself in the highly competitive banking sector and is better placed to grow with Fairfax’s investment.
Fairfax India, a dedicated investment vehicle for the country, has invested aggressively across sectors such as financial services, chemicals, aviation and logistics.
Watsa started Fairfax India in November 2014. In January 2015, Fairfax India floated a public offering in Canada to raise $1.06 billion. It later topped up its corpus with $500 million more.
In 2017, Fairfax India raised as much as $1.5 billion more to invest in India. Overall, the investment firm has a corpus of nearly $3 billion.