Tamilnad Mercantile Bank Ltd
Complete IPO details, including price band, financials, subscription status, and key insights.
Participate in the Tamilnad Mercantile Bank Ltd IPO with full transparency. Review issue details, company fundamentals, and financial performance, and apply securely through Alice Blue.
IPO Snapshot
Key metrics and details at a glance.
Price Band
₹510
Per ShareLot Size
28 Shares
Minimum Investment
₹14,280
Issue Size
₹792 Cr
Face Value
₹10
Per ShareIPO Type
Book Building
Retail Quota
10%
QIB Quota
75%
NII Quota
15%
IPO Timeline
Important dates for your applying strategy.
Subscription Status
Live demand across investor categories.
Track real-time subscription levels:
*Real-time data subject to exchange updates
Tamilnad Mercantile Bank Ltd
Business model, operations, and market positioning.
Issue Type
Book Building
ISIN
INE668A01016
About the Company
The Bank is one of the oldest and leading old private sector banks in India with a history of almost 100 years. It offers a wide range of banking and financial services primarily to micro, small and medium enterprises, agricultural and retail customers. As of March 31, 2022, it has 509 branches, of which 106 branches are in rural, 247 in semi-urban, 80 in urban and 76 in metropolitan centres. As of March 31, 2022, its overall customer base was approximately 5.08 million of which 79.78% comprised customers who had been associated with the bank for over five years.
Industry Overview
The Indian banking sector is significantly under-penetrated which provides immense opportunities for banks and other financial institutions. The banking sector enjoyed healthy deposit growth of ~10% CAGR between Fiscals 2015 and 2020. Traditionally, public banks have accounted for the major proportion of the banking credit outstanding. However, low profitability, weak capital position, low operational efficiency, and increase in stressed loans in the past few years led to slowdown in their loan growth. As a result, public banks gradually lost market share to private banks, which were relatively well capitalised and had higher degree of operational efficiency.
Company History
The Bank was incorporated in the name of `Nadar Bank Limited' on May 11, 1921 at Thoothukudi, Tamil Nadu as a limited company under the Indian Companies Act, 1913 pursuant to a certificate of incorporation issued by the erstwhile Assistant Registrar of Joint Stock, Palamcottah. The Bank commenced its business on November 11, 1921 at Thoothukudi, Tamil Nadu. Subsequently, the name of the Bank was changed to `Tamilnad Mercantile Bank Limited', with effect from November 27, 1962, pursuant to a letter of approval from the Government of India dated November 14, 1962 and a fresh certificate of incorporation dated July 17, 1968 was issued by the Assistant Registrar of Companies, Madras.
Products & Services
- The Bank offers a wide range of banking and financial services primarily to micro, small and medium enterprises, agricultural and retail customers.
Growth Strategy
- Continue to strengthen its product portfolios across deposits and advances
- Transformation through technology to improve efficiency and customer experience
- Continue to improve asset quality
Financial Performance
Revenue, profit after tax and total assets across the last 3 reported financial years.
Revenue
Amount in ₹ crore
Profit After Tax (PAT)
Amount in ₹ crore
Total Assets
Amount in ₹ crore
Figures in ₹ crore, on a standalone basis, as reported for FY24 to FY26.
Objects of the Issue
How the company plans to utilize IPO proceeds.
Use of Proceeds
The funds raised through this IPO will be used for:
Initial public offering of 15,840,000 equity shares of face value of Rs. 10 each ("Equity Shares") of Tamilnad Mercantile Bank Limited ("Bank" or "Issuer") for cash at a price of Rs. 510 per equity share (including a share premium of Rs. 500 per equity share) (the "Offer Price") aggregating to Rs. 807.84 crores* (the "Offer") comprising a fresh issue of 15,840,000 equity shares aggregating to Rs. 807.84 crores (the "Offer"). The offer constituted 10.00% of our post-offer paid-up equity share capital. The offer price is Rs. 510 per equity share and the offer price is 51 times the face value of the equity shares. * Subject to finalisation of the basis of allotment
*Subject to approvals and market conditions.
Strengths & Risks
Key competitive advantages and factors to consider before investing.
- Strong legacy, loyal customer base and focus on improving servicing framework;
- Strong presence in Tamil Nadu with focus to increase presence in other strategic regions;
- Advances with focus on MSME, agricultural and retail segments;
- Consistently growing deposit base with focus on low-cost retail CASA;
- Professionally managed Bank with experienced senior management team and board of directors;
- 37.73% of its paid up equity share capital or 53.76 million Equity Shares are subject to outstanding legal proceedings which are pending at various forums and, in connection with which, proceedings against the Bank have been initiated by various regulatory authorities, including the RBI, the Directorate of Enforcement, some of whom have imposed and sought to impose penalties on it in the past. The bank cannot assure you that these matters will be resolved in a timely manner or at all and any adverse developments in such proceedings could result in the imposition of injunctions or penalties or require it to incur significant costs to contest any of which could have a material impact on its reputation, business, financial condition and results of operation.
- Its business, reputation and financial results could be impacted by adverse results in legal proceedings. The company has also issued notices and initiated various recovery proceedings against defaulting borrowers under the SARFAESI Act and failure by such borrowers to repay the outstanding borrowings pursuant to such notices and proceedings may adversely affect its business. the bank is also susceptible to operational risks, including fraud, petty theft, negligence and embezzlement by its employees or its customers, which could harm its results of operations and financial position.
- The company has received and may in the future receive multiple anonymous whistle blower complaints, which may adversely affect its reputation which could consequently adversely impact its business, financial condition and results of operation.
- Its former director has filed a writ petition before the High Court of Madras seeking to prevent the Bank from undertaking the Offer, and the bank has received multiple complaints from former directors and shareholders of the Bank regarding disclosures in the Draft Red Herring Prospectus and invitations to participate in the offer for sale, any or all of which could harm it by impairing it ability to retain clients, subject the bank to significant legal liability, cause reputational harm or prevent it from proceeding with this Offer.
- The company has regional concentration in southern India, especially Tamil Nadu. Any adverse change in the economic, political, or geographical conditions of Tamil Nadu and other states in which its operate can impact the bank results of operations.