Zerodha (Trading & Demat Account)
FREE Equity Delivery and MF
Flat ₹20/trade Intra-day/F&O
Zerodha (Trading & Demat Account)
FREE Equity Delivery and MF
Flat ₹20/trade Intra-day/F&O
|
|
• SIBL is a scheduled commercial bank having Pan India presence.
• It suffered a setback for FY22, but now is on track of growth.
• It marked improved performances from FY23 onwards.
• The RI is at a discount of 31% to its last traded price as of March 05, 2024.
• Investors may park funds for the medium to long term rewards.
ABOUT COMPANY:
The South Indian Bank Ltd. (SIBL) popularly known as SI Bank, was incorporated over nine decades ago on January 25, 1929 in Kerala. It is a banking company recognized as a scheduled commercial bank within the meaning of the Reserve Bank of India Act, 1934. The Bank is predominantly present in Kerala and South India and is gradually expanding its presence in the country. As on December 31, 2023, it had a network of 948 branches across 26 states and four union territories, five satellite and ultra-small branches, 1,315 ATMs and 57 business correspondents. Out of the 948 branches as of December 31, 2023, 202 are in metropolitan areas, 182 are urban areas, 460 are in semi-urban areas, and 104 are in rural areas.
SIBL operates in three primary segments, i.e., retail banking, corporate/wholesale banking, and treasury operations, along with certain other banking operations. As part of its retail banking offerings, it offers several products and services to its retail customers, such as deposits (including term deposits, savings accounts and current accounts), banking services for non-resident Indians ("NRIs"), agricultural loans, housing loans and top-ups, LAP, automobile loans, retail gold loans, personal loans, and cards and payment services. These products are offered with certain variations as customized products to certain target groups such as senior citizens, students and salaried employees. The Bank's corporate/ wholesale banking business offerings include several commercial banking and corporate institutional banking products and services, such as working capital, term loans, documentary letters of credit, bank guarantees, supply chain finance and foreign exchange services. It has also entered into third party partnerships to offer insurance products, such as life insurance, general insurance and health insurance, and mutual fund products, among others.
The Bank's Pan-India branch network allows it to provide banking services to a range of customers, including large and mid-sized corporates, institutions, state-owned enterprises as well as commercial, agricultural, industrial and retail customers. As of December 31, 2023, the Bank had approximately 0.76 crore customers, reflecting its large customer base. The Bank also has internet, mobile banking and doorstep banking solutions. As of December 31, 2023, the Bank had approximately 0.12 crore internet banking users and 0.26 crore mobile banking users.
The bank has been able to contain NPA levels and maintain relatively healthy asset quality by implementing its independent risk management function, covering enterprise risk management, credit risk, market risk, and operational risks that are quality, among other risk objectives. The independent risk management system seeks to identify and manage risks at a group level, using technology to allow each business group to manage its risks effectively and within its policies.
ISSUE DETAILS:
It is coming out with a Rights Issue (RI) of 523185254 equity shares of Re. 1 each a fixed price of Rs. 22 per share to mobilize Rs. 1151.01 cr. The issue opens for subscription on March 06, 2024, and will close on March 20, 2024. The company is offering RI in the ratio of 1 for 4 to its eligible stakeholders as of the record date of February 27, 2024. The full amount it to be paid on application for the number of shares applied. Post allotment, shares will be listed on BSE and NSE.
The issue is solely lead managed by IIFL Securities Ltd. and Link Intime India Pvt. Ltd. is the registrar of the issue.
Post-RI, company's current paid-up equity capital of Rs. 209.27 cr. will rise to Rs. 261.59 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 5755.04 cr.
FINANCIAL PERFORMANCE:
For the last two fiscals, the bank has (on a consolidated basis) posted a total income/net profit of Rs. 7620.64 cr. / Rs. 44.98 cr. (FY22), and Rs. 8045.81 cr. / Rs. 775.09 cr. (FY23).
As per unaudited performance submitted to stock exchange, the company has reported a net profit of Rs. 782.52 cr. on a total income of Rs. 7507.62 cr. This indicates improved margins of the bank with mixed operations providing more financial services under one roof.
DIVIDEND POLICY:
The company came back to dividend list for FY23 with 30% dividend. The last dividend was paid at 25% for FY19. It will adopt a prudent dividend policy post listings of RI shares based on its financial performance and future prospects.
SCRIP PERFORMANCE: BASED ON BSE WEBSITE DATA: SCRIP CODE: 532218 (FV Re. 1).
The scrip last closed on cum-right basis at Rs. 37.06 on February 26, 2024, and opened on an ex-right basis at Rs. 33.67 on February 27, 2024. Since then, it has marked a high/low of Rs. 33.73 / Rs. 30.60. The scrip last closed at Rs. 32.09 as of March 05, 2024. For the last 52 weeks' it has posted a high/low of Rs. 36.91 / Rs. 12.67.
The promoters' holding is NIL in this bank, as it has 100% public holding. The counter is well managed above the RI price to lure investors.
Review By Dilip Davda on March 5, 2024
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on the information published here. My reviews do not cover GMP market and operators game plans. Any reader taking decisions based on any information published here does so entirely at their own risk. Investors should bear in mind that any investment in stock markets is subject to unpredictable market-related risks. The above information is based on RHP and other documents available as of date coupled with market perception. The author has no plans to invest in this offer.
About Dilip Davda
Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.
Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.
(Dilip Davda -SEBI registered Research Analyst-Mumbai,
Registration no. INH000003127 (Perpetual)
Email id: dilip_davda@rediffmail.com ).
The The South Indian Bank Rights Issue 2024 Analysis helps you to understand about the company, offer detail, valuation, capital structure and financial performance. Our SEBI registered Rights Issue Analysts tells you if The South Indian Bank Rights Issue 2024 worth investing. The The South Indian Bank Rights Issue 2024 Note sets the Rights Issue expectations in systematic way which tells you if The South Indian Bank Rights Issue 2024 good to buy (good or bad / yes or no). The Rights Issue Forecast tells you weather to invest in The South Indian Bank Rights Issue 2024 by providing Rights Issue recommendations i.e. subscribe, avoid and neutral.
Add a public comment...
FREE Intraday Trading (Eq, F&O)
Flat ₹20 Per Trade in F&O
|
|
