Fairfax Group is likely to sell 9.72% in CSB Bank

According to a term sheet issued by banker IIFL, FIH Mauritius Investments, an entity of the Fairfax Group is expected to sell 1.68 crore shares in the Kerala-based bank at a 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% after the stake is sold. CSB Bank shares have fallen 15% so far this year, compared to the Sensex’s 9% gain.

In 2018, the banking regulator allowed Fairfax Group to buy up to 51% stake in the bank, becoming the first bank in India to be majority owned by a foreign investor.

agencies

As per the banking regulator’s earlier rules, bank promoters had to reduce their stake to 15% after an investment period of 15 years.

The rules were changed after Uday Kotak, the billionaire founder of Kotak Mahindra Bank, challenged the rules in the Bombay High Court. Kotak argued that regulators should allow promoters to hold up to 26% of bank shares.

After the new rules came into effect, IndusInd Bank’s promoters, the Hinduja brothers, also sought approval from the Reserve Bank of India to increase the stake to 26%. Earlier this year IndusInd International Holdings was earlier given regulatory approval to increase its ownership in the bank to 26%.