FIH Mauritius Investments Sells 9.72% Stake in CSB Bank for Rs 595 Crore

FIH Mauritius Investments Ltd, a promoter of CSB Bank Limited, has sold 16,868,645 equity shares of the bank, representing approximately 9.72% of its total issued and paid-up equity share capital. The sale transaction, which took place on June 27, 2024, was conducted through an on-market sale.

Key details of the sale:

• FIH Mauritius Investments held 86,262,976 shares (49.72% stake) in CSB Bank before the sale.
• The shares were sold at the market price, generating proceeds of around Rs 595 crore for FIH Mauritius Investments.
• After the sale, FIH Mauritius Investments' stake in CSB Bank has reduced to 40% (69,394,331 shares).
• The total issued and paid-up equity share capital of CSB Bank remains unchanged at 173,485,827 equity shares with a face value of Rs 10 each.

The sale was disclosed by FIH Mauritius Investments to CSB Bank and the stock exchanges as required under the SEBI Substantial Acquisition of Shares and Takeovers (SAST) Regulations. CSB Bank's shares are listed on the National Stock Exchange of India (NSE) and BSE Limited (BSE). The bank's total diluted share/voting capital after the sale stands at Rs 1,734,858,270.

Check the PDF here.

Reason for the Dilution of Shares

Fairfax India Holdings Corporation, through its wholly-owned subsidiary FIH Mauritius Investments Ltd, has sold a 9.7% equity stake in CSB Bank Limited for gross proceeds of Rs 595 crore (approximately $70 million). This sale was conducted on the stock exchange in India.

The primary reason for this stake sale is to comply with the dilution requirements set by the Reserve Bank of India (RBI), the banking regulator in India. As per RBI regulations, Fairfax India, as a promoter of CSB Bank, needs to reduce its shareholding in the bank to 40%.

After the sale, Fairfax India's ownership in CSB Bank has been reduced from 49.7% to 40%, bringing it in line with the RBI's dilution schedule. This move ensures that Fairfax India remains compliant with the regulatory norms governing promoter shareholding in banks.

The sale generated gross proceeds of Rs 595 crore for Fairfax India, which is approximately $70 million at current exchange rates. CSB Bank's shares are listed on the National Stock Exchange of India (NSE) and BSE Limited (BSE). 

Read the Press Release here

CSB Bank

CSB Bank, founded in 1920, is the oldest private sector bank in Kerala. Over the past century, the bank has grown significantly, adapting to social, political, and economic changes. Currently, CSB Bank operates 791 branches and 753 ATMs nationwide, offering a range of banking products and services through multiple delivery channels.

In 2019, the bank underwent a transformation, rebranding itself and completing a successful IPO. CSB Bank focuses on initiatives to enhance its business, and upgrade processes, technology, and human resources, with a goal of becoming a full-service contemporary bank.

The bank has a client base of over 2.15 million customers and offers tailored banking products to various sections of society through its four principal business areas: SME Banking, Retail Banking, Corporate Banking, and Treasury Operations.

Fairfax India 

Fairfax India Holdings Corporation is an investment holding company that aims to achieve long-term capital appreciation while preserving capital. It invests in public and private equity securities, as well as debt instruments, in India and Indian businesses or other businesses with customers, suppliers, or businesses primarily conducted in or dependent on India.