Catholic Syrian bank Ltd- IPO @ Rs 193-195 of Rs each- Closes on 26th Nov 2019
Some facts about the IPO:
Investors by and large have had an aversion to the IPOs in the recent past, rightly so as they have burnt their fingers in many IPOs- be it promoted by PSUs like SBI LIfe or Private sector corporates. Of course there was a silver line in one or two issues like IRCTC.
Now that one of the oldest Private Banks viz. CSB has come out with its maiden IPO with the pricing of Rs 193-Rs 195, one wonders whether this would evoke enough interest amidst the investors. Of course the issue was subscribed fully on the first day itself and it closes on Tuesday -26th Nov. This bank has been focusing on MSME, Gold loans and has a good chunk of NRIs. Ironically this bank has turned to black only in the first half of current fiscal and had a foreign investment by a Mauritius Investment company to the tune of Rs1200 cr.
This bank suffers from weak operational performance over the past three fiscal with net losses and a high regional concentration. Additional provisioning and investments in technology, branding etc., which would impact negatively its bottom line. The bank’s SMEs are rated as BBB and below rated, has good exposure to NBFC/HF sector.
Its issue price is valued at 2.1 times more than its Book Value which is seen as expensive. Small players such as Federal bank, South Indian bank have lower rates. bank’s NPA is around Rs 326 Cr and slippages at Rs 85 Cr in H1FY 20 are still areas of concern..
Hence the issue does not attract the interest of the Investors at large based on its past performance and the present pricing. If still one is interested in the issue perhaps can wait and pick it up on listing.