CSB Bank, formerly Catholic Syrian Bank, made a strong stock-exchange debut on Wednesday with its shares listing at a 41% premium to the initial public offering price and inching higher.
Shares of CSB Bank, controlled by Indian-born Canadian billionaire Prem Watsa’s investment firm Fairfax Financial Holdings Ltd, started trading at Rs 275 apiece on the BSE compared with the IPO price of Rs 195 apiece. The stock touched a high of Rs 307 apiece before closing the debut day at Rs 300.10 apiece, up 53.90% from the IPO price.
CSB Bank now commands a market valuation of Rs 5,205.4 crore ($725 million) against the Rs 3,600 crore ($502 million) valuation it sought in the IPO.
The strong showing comes after the bank’s IPO was covered almost 87 times, thanks to high demand from investors across categories.
The IPO comprised a sale of new shares worth Rs 240 crore and a sale of 19.77 million shares by 26 shareholders worth up to Rs 385 crore. The selling shareholders included HDFC Life Insurance Co. Ltd, ICICI Prudential Life Insurance Co. Ltd, Federal Bank and ICICI Lombard General Insurance Co. Ltd.
Fairfax, which acquired a 51% stake in CSB Bank last year, didn’t sell any shares in the IPO. Fairfax’s 40% stake out of its total holding will remain locked in for five years in line with regulatory requirements.
Venture capital investor Volrado Venture Partners Fund II, which acquired CSB Bank shares in May 2017, is exempt from the lock-in period but did not sell any shares in the IPO.
CSB Bank, incorporated in 1920, is one of the oldest private-sector banks in India. It has a strong base in Kerala, Tamil Nadu, Karnataka, and Maharashtra.
The proceeds from the fresh sale of shares will also help the bank comply with Basel-III norms and other regulatory guidelines.
Axis Bank and IIFL Holdings managed the share sale.
This was CSB Bank’s second attempt to go public. Its previous plans in 2015 hit hurdles due to market volatility.