Tamilnad Mercantile Bank IPO | Review

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Tamilnad Mercantile Bank Limited has come up with an initial public offer (IPO). It will open on September 05-07, 2022 at Rs.500-525 a share. The IPO issue size is around Rs.831.60 crore. The minimum bid will be for 28 shares and in its multiples thereafter.

Overview

Tamilnad Mercantile bank is one of the oldest and leading old private sector banks in India with a history of almost 100 years. The bank offers a wide range of banking and financial services primarily to micro, small and medium enterprises (“MSME”), agricultural and retail customers. It has 509 branches, of which 106 branches are in rural, 247 in semi-urban, 80 in urban and 76 in metropolitan centers. The bank’s customer base is approximately 4.93 million. It was incorporated as ‘Nadar Bank Limited’ in 1921 and its name was changed to ‘Tamilnad Mercantile Bank Limited’ in 1962. Bank’s deposits have grown at a healthy pace of 8.0% CAGR, while its advances grew at 8.3% CAGR.

The bank also focuses on diversifying its growth in other high growth regions of India which will help increase its network and client base. Other than Tamil Nadu, it is present in 15 other states and 4 union territories of India. Apart from Tamil Nadu, it has a sizable presence in the states of Maharashtra, Gujarat, Karnataka, and Andhra Pradesh with presence across 90 branches and 123 ATMs and 15 CRMs. The bank’s focus on quality of service and 113 nurturing long term relationship with our customers has enabled it to develop a well-recognized and trusted brand in south India, particularly in Tamil Nadu, India.

Website – https://www.tmb.in/

Promoters

Bank is a professionally managed bank and does not have an identifiable promoter in terms of the SEBI ICDR Regulations.

Strength & Weakness

Strengths	Weaknesses
Strong legacy & loyal customer base	Regional concentration in southern India
Strong presence in Tamil Nadu	Contingent liabilities exceed net worth
Advances with focus on MSME, agricultural and retail segments	Received multiple anonymous whistleblower complaints
Consistently growing deposit base	Negative cash flows in the past
Experienced management team	Majority of business premises are leased
Strong asset quality	Dependent on Key Managerial Personnel
Consistent financial performance	Competitive Industry

Customers

Micro, small and medium enterprises (MSMEs)

Agriculture

Retail

Competitors

HDFC Bank	ICICI Bank	Axis Bank
State Bank of India	Bandhan Bank	Kotak Mahindra Bank
IndusInd Bank	AU Small Fin Bank	IDFC First Bank
Bank of Baroda	Federal Bank	RBL Bank

Company Financials

Year	Revenue (in Crore)	Profit (in Crore)
31-Mar-2020	3,635.79	294.61
31-Mar-2021	3,992.52	464.89
31-Mar-2022	4,253.40	654.04

Object of Issue

1) To carry out the Offer for Sale (OFS).

2) Benefits of listing the Equity Shares on the Stock Exchanges.

3) To utilize the net proceeds from the fresh issue towards augmenting its Tier–I capital base to meet its future capital requirements.

4) For meeting the expenses in relation to the Offer

Tamilnad Mercantile Bank IPO Lot Size

Application	Lot	Shares	Amount
Minimum	1	28	Rs.14,700
Maximum	13	364	Rs.1,91,000

Tamilnad Mercantile Bank IPO details

IPO Opening Date	September 5, 2022
IPO Closing Date	September 7, 2022
Face Value	Rs.10 per Equity Share
IPO Price	Rs.500-525 per share
Market Lot	28 shares
Minimum Order Quantity	28 shares
Listing At	NSE, BSE
No. of shares offered (OFS)	1,58,40,000 shares
Issue Size	Up to Rs. Crore
QIB Shares Offered	75% of the offer
Retail Shares Offered	15% of the offer
NII/HNI Shares Offered	10% of the offer

Tamilnad Mercantile Bank IPO Timetable

IPO Date	September 5-7, 2022
Allotment Date	September 12, 2022
Initiation of Refunds	September 13, 2022
Credit of share to Demat a/c	September 14, 2022
IPO Listing Date	September 15, 2022