South-based private sector lender CSB Bank Ltd is likely to make a grand debut on exchanges on Wednesday after its Rs 410 crore initial public offering (IPO) saw a massive subscription of almost 87 times.
Most analysts are expecting CSB Bank shares to list at a hefty premium of around Rs 50 per share, over 25% more than the final issue price of Rs 195 apiece. The grey market premium is also around 60-65 per share, according to some media reports.
“With an overwhelming response to CSB Bank IPO, we believe it would list around Rs 250+ levels, which translates to 28% premium over the upper end of the IPO price Rs 195. A premium listing seems to be justified, assuming turnaround in business efficiency which is expected to further improve going forward,” Prashanth Tapse, AVP Research, Mehta Equities, told Moneycontrol.
Astha Jain, senior research analyst at Hem Securities and Rajesh Agarwal, also expects CSB Bank to list at a premium of Rs 55-65. CSB with its stable and granular deposit base has professional and experienced management with strong and independent Board which infuses optimism in future prospects of the bank, she said.
The CSB Bank IPO had opened for subscription during November 22-26. The Rs 410 crore issue had received bids worth Rs 19,586 crore. The portion set aside for non-institutional investors was subscribed 164.68 times, qualified institutional buyers’ portion was subscribed 62.18 times and retail investor portion at 44.53 times.
A similar response was received by the IPO of state-owned Indian Railway Catering and Tourism Corporation (IRCTC) in October. Its shares had more than doubled from the issue price on the listing day itself.
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