According to the term sheet issued by the banker IIFL, FIH Mauritius Investments, an entity belonging to Fairfax Group is expected to sell 1.68 crore shares in the Kerala-based bank at a floor price of ₹352.4 per share. The floor price represents a 1% discount to Wednesday’s closing price of ₹355.95.
FIH held a 49.72% stake in the bank as of March 31, 2024, which will come down to 40% post the stake sale. Shares of CSB Bank have declined 15% so far this year compared to Sensex’s gain of 9%.
In 2018, the banking regulator had allowed Fairfax Group to buy up to a 51% stake in the bank making it the first bank with majority ownership by a foreign investor in India.
As per the banking regulator’s earlier rules, bank promoters had to bring down their stake to 15% after an investment period of 15 years. These rules changed after Kotak Mahindra Bank’s billionaire founder, Uday Kotak, challenged these rules in the Bombay High Court. Kotak had argued that regulators should allow promoters to keep up to 26% of bank shares.After the new rules came into effect, the promoters of IndusInd Bank, the Hinduja brothers, also sought approval from the Reserve bank of India to raise the stake to 26%. Earlier this year IndusInd International Holdings was granted regulatory clearance earlier to increase their ownership in the bank to 26%.