CSB Bank IPO Review, Issue Details, DRHP, GMP

CSB bank ipo review pic

CSB is one of the oldest Indian private sector bank with history of over 98 years. It has a strong base in Kerala along with significant presence in Tamil Nadu, Karnataka, Maharashtra. The company offers a wide range of products and services to their overall customer base of more than 1.3 million. Besides this, they have variety of customers retail, SME, and NRI customers. In this content, you will get a clear idea regarding the bank. In addition, our special CSB Bank IPO Review along with its issue details, DHRP.

CSB Bank Issue Details

  • IPO Opens on – Nov 22, 2019
  • IPO Closes on – Nov 26, 2019
  • Face Value – Rs.10 Per Equity Share.
  • Issue Price – Rs.193 to 195 Per Equity Share
  • Issue Type – Book Built Issue IPO
  • Market Lot – 75 Shares
  • Minimum Order Quantity – 75 Shares
  • Issue Size – 21,021,821 Eq Shares of Rs.10
  • (aggregating up to Rs.409.68 Cr)
  • Fresh Issue – 1,243,523 Eq Shares of Rs.10
  • (aggregating up to Rs.24.00 Cr)
  • Offer for Sale – 19,778,298 Eq Shares of Rs.10
  • (aggregating up to Rs.385.68 Cr)
  • Listing Exchange – BSE NSE
  • Draft Prospectus – Click Here

Purpose of Issuing the IPO

  • To meet the capital requirement of the company.
  • Also, to arise the growth of the bank’s asset, loans, advances, investment portfolios, etc.
CSB-bank-limited

Company Details

  • They deliver their products and services through multiple channels which include 412 branches and 290 ATMs spread across 16 states as well as four union territories.
  • Moreover, their business also spread various alternate channels like micro ATMs, debit cards, internet banking, mobile banking, point of sale services and UPI.
  • The company believe with on their quality of service along with nurturing long term relationship with their customers.
  • They already have developed a well recognized and trusted brand in south India, especially in the states of Kerala and Tamil Nadu.
  • While the Bank has a long operating history as a traditional Indian bank, they are currently focusing on implementation of strategic changes in their business model to function efficiently and effectively as a full service new age private sector bank backed by their new marquee investor – FIHM, the bank’s Promoter.
  • They have also introduced a mechanism for review of performance by a very special committee of all officer employees of their Bank on completion of 50 years of age.
  • The company also relocated their staff department and credit hub to Chennai, which they believe, will attract best talent and improve their productivity.
  • They have their four principal business areas, like, (a) SME banking, (b) retail banking, (c) wholesale banking, and (d) treasury operations.
  • The company offers a wide range of products including term loans, working capital loans, invoice/bill discounting, letters of credit as well as bank guarantees.
  • So, they believe that lending to SME customers enables them to diversify their credit risk due to relatively smaller individual exposures.

Company Management

  • Mr. Madhavan Karunakaran Menon Designation: Part – time Chairman and Non–executive Director
  • Mr. Rajendran Chinna Veerappan Designation: Managing Director and Chief Executive Officer
  • Mr. Sumit Maheshwari Designation: Non–executive Director
  • Mr. Thomas Mathew Designation: Independent Director
  • Ms. Bhama Krishnamurthy Designation: Independent Director

Company Products

Here, the company products are as follows. In addition, we add the sub products too.

Deposit Products

  • Current account
  • Savings bank account
  • Corporate Salary savings accounts for employee groups
  • Term deposit accounts for domestic customers
  • Cumulative deposit accounts
  • Products for NRI customers
  • Other deposit products

SME products

  • Term loans
  • Workingcapital loans
  • Export Finance
  • Import Finance
  • Letter of Credit
  • Buyers’/ Suppliers’ Credit
  • Bank Guarantee
  • Commercial Vehicle loans
  • Inland bill discounting
  • TReDS bill discounting

Retail asset products

  • Home loans
  • Personal loans
  • Vehicle loans
  • Loans against property
  • Agricultural loans
  • Gold loans
  • Education Loans

Corporate products

  • Workingcapital finance
  • Corporate loans
  • Term loans
  • Bill Finance
  • Export/ Import Finance
  • Buyers’/ Suppliers’ Credit
  • Letter of Credit
  • Bank Guarantee
  • Bills discounted under domestic letters of credit
  • Cash management services
  • Treasury Products

Other products/ services

  • Money transfers and remittances
  • RTGS/ NEFT
  • Utility and bill payments
  • Internet banking
  • Mobile banking
  • Foreign exchange
  • Distribution of insurance products
  • Safe Deposit Locker facility
  • Cash management
  • Institutional Fee Collection Portal – CSB INSTA pay

Competitive Strategies

Firstly, the bank’s competitive strength is described below. After that we will move towards the strategies.

  • Very strong channel network and trusted brand in South India platform.
  • Well established SME (Small and medium enterprise)business
  • Quite Strong capital base for company growth
  • The company has retail offering driven by strong gold loan portfolio
  • They have stable and granular deposit base
  • Professional and experienced management along with strong and independent Board.
  • Streamlined risk management controls, policies and procedures.

Unique Business Strategies

Here, CSB bank’s unique strategies are as follows:

  • Their accelerate transformation as new age private bank
  • Grow their asset business along with focus on SME, agricultural and retail customers by leveraging their capital position.
  • Grow and diversify their distribution infrastructure in key geographical locations.
  • CSB bank continue to leverage strong deposits franchise.
  • Maximizing non-interested income by widening products and services for corporate and retail customers. For instance, they have opened many branches for it.
  • Invest in technology to improve operational quality, efficiency, sociability and customer experience.
  • Also. they are strengthening risk management.

Financial Statement

Moreover, here is the financial statement. Most importantly, we’ve added a review below.

CSB bank ipo review

CSB Bank IPO Review

As per the above financial statement, the bank has made its highest profit in the financial year 2018. After that, in FY19, the profit ratio become lower. So, according to their DRHP (draft red herring prospectus), basic and diluted EPS (earnings per share) is 7.90 (FY19). The company has not released their recent price to earnings ratio. In addition, RoNW (return on net worth) is -6.74%. Moreover, NAV value/share is 73.54. So, based on our analysis, we have seen that their fundamentals are not so good. Return on Net Worth is negative and EPS is also not up to the mark. Hence, CSB Bank IPO Review carries a POSITIVE view. In addition, its GMP (grey market premium) is running between 65-70 and kosak rate is 180-200. You may check out the GMP and Kosak rate of upcoming IPO from our site too.

Conclusion

The best strategy for CSB IPO will be using our last day investing technique for the best IPO to watch.

CSB Bank IPO Review

When I am updating this post at 14:40 PM, the QIB bidding seen at 16.85 times. This makes this IPO as attractive for listing gains. We suggest APPLY in this issue for good gains on listing day.

Author: Ankita Sarkar

Ankita is a graduate in English language and she has also done her MBA from the Calcutta University. She has a high knack in the stock markets. She is a NISM certified Research Analyst. An experienced stock market content writer Ankita is also trading successfully on her own account.

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