CSB Bank IPO Review - Is it worth to apply? - Indian IPO Blog

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Sunday, November 24, 2019

CSB Bank IPO Review - Is it worth to apply?

CSB Bank IPO is open for subscription from November 22 and the IPO has been subscribed fully.
The issue will close on November 26. Equity shares are proposed to be listed on the BSE, as well as the National Stock Exchange on December 4

Is it worth subscribing to CSB Bank IPO? Here's what expert brokerages have to say:

1. HDFC Securities Review on CSB Bank IPO

As per HDFC Securities, the bank's business and financial performance could suffer if it is unable to effectively manage the level of its NPAs.

"Although CSB Bank is making efforts to improve collections and to foreclose on existing impaired loans in a timely manner, there cannot be any assurance that it will be successful in its efforts or that the overall quality of its Bank’s loan portfolio will improve or will not deteriorate in the future," HDFC Securities said.

Issued notices and initiated various recovery proceedings against defaulting borrowers under the SARFAESI Act are also among key concerns, HDFC Securities said.


Moreover, CSB’s funding requirements are primarily met through customer deposits. If it fails to sustain or achieve growth of its deposit base, including its current and savings account deposit base, its business may be adversely affected, HDFC Securities said.


2. IndiaNivesh Review on CSB Bank IPO

IndiaNivesh recommends subscribing to CSB IPO.


"CSB Bank has seen a remarkable turnaround after the new promoter took charge of its affairs in FY19. At the upper end of the issue price, it is available at P/BV of around 2.19 times on ‘TTM’ basis. We expect CSB Bank to embark on a growth trajectory of over 20 percent on business and profitability for the next couple of years. There is ample scope for it to get re-rated at higher a multiple of 2.5 times to 2.7 times P/BV after listing," said IndiaNivesh.


3. BP Securities Review on CSB Bank IPO

BP Equities recommends subscribing to the issue.

"CSB has posted turnaround results in six months of FY20 and has improved its operational and financial performance. We believe the bank should do well with the recent capital raise and its strong risk management frameworks. We give subscribe rating to the IPO," said the brokerage firm.


"On the valuation front, at the upper end of the price band, CSB is valued at 2.31 times P/BV and 25.31 times P/E. Taking into account huge growth prospects and its comfortable asset quality, the stock looks attractive for investment," said BP Equities.


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