CSB Bank shares will see a reaction on Thursday, October 15, after promoter Fairfax was chosen to acquire a controlling stake in IDBI Bank. Fairfax currently holds 40% in CSB Bank. RBI rules say one promoter cannot run two competing banks, so investors are watching what Fairfax does next.
Shares of Thrissur, Kerala-based private lender CSB Bank Ltd. will see a reaction on Thursday, October 15, to the news developments from overnight, which saw its promoter Fairfax been chosen to acquire a controlling stake in another lender, IDBI Bank.
Fairfax Financial will acquire 60.72% stake in IDBI Bank for ₹52,878 crore, marking the largest Indian Foreign Direct Investment (FDI) deal in the financial services sector once its completed. The news though, has raised an important question - what will Fairfax do with its stake in CSB Bank?
At the end of the September quarter, FIH Mauritius Investments Ltd., an entity of Fairfax, held a 40% stake in the company.
According to RBI rules on bank ownership and control, one promoter entity cannot run two competing banks at the same time. In case the regulators permit, Fairfax could either keep its CSB Bank stake, or explore a merger with IDBI Bank, which would ensure a more complex integration process.
Who Owns Stake In CSB Bank?
Besides Fairfax, which being the only promoter entity, held a 40% stake, the remaining belonged to public shareholders.
India's Mutual Funds had a 13.15% stake in the bank at the end of the September quarter, led by SBI Smallcap Fund with a 6.34% stake, along with Sundaram MF (2.29%), ICICI Prudential Multicap Fund (1.8%), and Bandhan Smallcap Fund (1.6%).
Foreign Portfolio Investors such as Amansa Holdings and Theleme India Master Fund held a 4.58% and 3.29% stake in the bank as of September 30, according to its shareholding pattern on the BSE.
Nearly 63,000 small retail investors, or those with authorized share capital of up to ₹2 lakh, had a 12.56% stake in CSB Bank, while larger retail participants, or those with authorized share capital of over ₹2 lakh had a 6.55% stake in the lender as of the September quarter.
In its recently announced business update for the July-September period, CSB Bank reported a 22% growth in gross advances, while its deposits grew by 18% on a year-on-year basis. Term deposits also saw a 22% growth from last year, while growth in its gold loan business stood at 36%.
Shares of CSB Bank ended Wednesday's session 5.5% higher, seeing a sharp spike towards the close of the session to end at ₹325. The stock is down 33% so far in 2026, while its down 44% from its 52-week high level of ₹574. The stock is still holding above its IPO Price of ₹197 per share.