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After a spectacular debut on listing, CSB Bank appears to be fast losing steam. The stock, which rallied over 50 per cent on the first day of listing (from its IPO price), has lost over 22 per cent in just two weeks.
Given that the stock is still pricey at 2.6 times book value (post-issue as of September), it could fall further in the coming weeks, giving up all its listing gains.
As such, the stock at its IPO price of ₹195 was a pricey offer, given that it had just moved into the black in the first half of this fiscal — after reporting net losses in the past three fiscals.
High regional concentration, exposure to BBB and below rated book (about 57 per cent of SME exposure is BBB and below), and notable bad loan book, are key concerns.
While the bank has streamlined people cost, investments in technology/branding could keep costs high.
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