Private stake sale off, Catholic Syrian Bank reconsiders IPO plans
LENDERS THAT HAVE GONE PUBLIC IN LAST TWO YEARS INCLUDE AU SMALL FINANCE BANK, EQUITAS HOLDINGS, UJJIVAN FINANCIAL SERVICES AND UNIVERSAL BANK RBL
The Catholic Syrian Bank (CSB) is once again considering going public as talks for a stake sale to Prem Watsa’s Fairfax Financial Holdings have fallen through, two people aware of the development said.
“An IPO is back on the table for Catholic Syrian Bank. They are seriously exploring that. They are in preliminary discussions. Though no final decision has been taken. For now, they are exploring both an IPO and they continue to explore a private stake sale,” said one of the persons cited above, requesting anonymity as the talks are private.
The failure of talks with Canadian firm Fairfax, which had been going on for over six months, is the reason why the lender is looking at reconsidering a public offering, he added.
On June 30, Mint reported that Prem Watsa-helmed Fairfax Financial Holdings Ltd’s proposed deal to pick up a 51% stake in CSB had fallen through over differences in valuation.
According to a May 30 Bloomberg report, an external agency hired by the bank arrived at a valuation of ₹165-200 a share, plus a control premium of at least 15%. Watsa’s Fairfax was unwilling to match the price being asked by the bank, based on this valuation.
“We would not like to comment on the capital raising plans of the bank,” a spokesperson for CSB said in an email response.
In May, Business Standard reported that various private equity and strategic investors, including Aion Capital, JM Financial and the Everstonebacked IndoStar Capital, had shown interest to acquire stake in the bank.
The bank was looking at an IPO before it started talking to private investors such as Fairfax.
In March 2015, the private sector lender had filed a draft red herring prospectus to raise ₹400 crore through an IPO. In June 2015, Sebi approved the lender’s public offering. However, the bank let the approval lapse.
Subsequently, the bank raised ₹114.5 crore through a preferential issue of shares to investors such as Edelweiss Tokio Life Insurance Co Ltd, Reliance Capital Ltd, ICICI Prudential Life Insurance Co Ltd, HDFC Standard Life Insurance Co Ltd, filings with the registrar of companies show.