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Last Updated : Dec 04, 2019 04:41 PM IST | Source: Moneycontrol.com

Stellar Listing: CSB Bank closes at Rs 300.10, jumps 54% over issue price

CSB Bank remained above Rs 290 levels throughout session, which clearly reflected the appetite for the stock.

 
 
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Shares of CSB Bank witnessed huge demand from investors on listing day, December 4 as the stock closed with more than 50 percent gains.

The stock ended at Rs 300.10 on the BSE, an increase of 53.90 percent over issue price of Rs 195 per share after hitting day's high of Rs 307 in early trade itself.

It remained above Rs 290 levels throughout session, which clearly reflected the appetite for the stock.

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On the National Stock Exchange, the stock gained 53.87 percent to end at Rs 300.05 after hitting an intraday high of Rs 306.90.

In terms of volumes, CSB Bank traded with volumes of 3.71 crore shares on the NSE and 40.27 lakh shares on the BSE.

Kerala-based private sector lender had Rs 410 crore through public issue during November 22-26, which was oversubscribed by nearly 87 times.

CSB Bank has strong channel network and is a trusted brand in South India, with strong capital base post investment by Fairfax India through FIH Mauritius Investments Ltd (FIHM).

FIHM had acquired more than 50 percent stake in the bank for Rs 1,200 crore and that capital helped the company improve its financials and grow significantly in first half of FY20.

The bank has a well-established SME (small-to-med-size enterprise) business with retail offering driven by a strong gold loan portfolio and lower operational costs.

Gold loans constituted a major part of the bank's advances, contributing 33.17 percent to total advances as on September 30, 2019. Its gold loan book grew from Rs 2,026.3 crore in March 2017 to Rs 3,781.8 crore on September 30, 2019.

"The bank has a good scope of growth and is a favourable investment opportunity focused on SME and gold-loan portfolio for short-term investors," Prashanth Tapse, AVP Research, Mehta Equities said.

He feels there is an ample scope for CSB Bank to get re-rated at higher multiples of P/BV considering the turnaround performance and focus on implementation of strategic changes in business model to function as a full-service private bank.

The bank is working on technological front, with the increasing acceptance of digital transactions and upgrading infrastructure.

Its efforts to strengthen risk management have improved asset quality. Its gross non-performing assets decreased to 2.86 percent as of September 2019, from 4.87 percent in March 2019 and net NPAs decreased to 1.96 percent from 2.27 percent in the same period.

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First Published on Dec 4, 2019 04:41 pm
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