Tamilnad Mercantile Bank’s ₹830 cr IPO to open on Sept 5; details here

The initial public offering (IPO) of private sector lender Tamilnad Mercantile Bank will open for subscription on September 5, 2022, with the bank eyeing to raise around ₹830 crore through the public listing of shares. The lender has fixed a price band of ₹500-525 apiece for the IPO, which is completely a fresh issue of up to 1,58,40,000 equity shares with a face value of ₹10 each, aggregating to ₹831.6 crore.

The issue of the Tamil Nadu-based bank is set to hit Dalal Street on September 5 and close on September 7, while the anchor book will open on September 2. The lot size is 28 equity shares and in multiples thereafter, which means retail investors can invest a minimum of ₹14,700 and a maximum of ₹1,91,100 in this issue.

The bank, which provides banking and financial services to retail customers, micro, small, and medium enterprises (MSMEs), intends to use IPO proceeds to augment its tier-I capital base to meet future capital requirements as well as to meet offer issue expenses. The private sector lender also expects to receive benefits of listing the shares on the stock exchanges.

As per the offer document filed with the market regulator Securities and Exchange Board of India (SEBI), 10% of the issue is reserved for retail investors, while 15% of the shares are kept aside for Non-Institutional Investors (NIIs). Up to 75% of the offer is reserved for Qualified Institutional Investors (QIBs).

Established in 1921, Tamilnad Mercantile Bank (TMB) is one of the oldest private sector banks in India with a history of more than 100 years. It is a professionally managed bank and does not have any identifiable promoters.

As of March 31, 2022, the Thoothukudi-headquartered bank has a total branch network of 509 and a total customer base of 5.08 million. The lender has a significant market presence in Tamil Nadu with 369 branches, while it is also present in 15 other states and 4 union territories of India.

For the financial year ended March 31, 2022, the bank reported profit after tax (PAT) of ₹901.9 crore as compared to ₹654.04 crore in the previous fiscal and ₹464.89 crore in FY20. The total revenue increased to ₹4,656.44 crore, from ₹4,253.4 in FY21 and ₹3,992.53 crore in FY20.

Link Intime India Private is the registrar to the issue, while Axis Capital, Motilal Oswal, and SBI Capital Markets have been appointed as lead managers. Shares of the company are likely to list on domestic bourses - BSE and NSE - on September 15, 2022.