Tamilnad Mercantile Bank IPO

With a nearly 100-year existence, Tamilnad Mercantile Bank Limited is one of India’s oldest and most prestigious private sector banks (Source: CRISIL Report). Tamilnad Mercantile Bank IPO will hit the stock market in 05 September 2022.

About Tamilnad Mercantile Bank

Tamilnad Mercantile Bank principally serve micro, small, and medium-sized businesses (“MSME”), agricultural, and retail clients (“RAM”) with a comprehensive range of banking and financial services. According to CRISIL, Among their peers, they earned the second highest Net Profit in Fiscal 2021.

They have 509 outlets as of June 30, 2021, with 106 in rural, 247 in semi-urban, 80 in urban, and 76 in metropolitan areas.

As of June 30, 2021, they had about 4.93 million clients, with 3.45 million (69.96%) having been with them for more than five years.

They are contributing 275,619 million (67.02%) to their deposit and 179,638.99 million (57.56%) to their advances portfolios.

Journey

In 1921, they were founded as ‘Nadar Bank Limited,’ and in 1962, they changed their name to ‘Tamilnad Mercantile Bank Limited.’ In 1962, the Reserve Bank of India granted them permission to do banking activity.

They have a huge foothold in the state of Tamil Nadu, with 369 offices, 941 automated teller machines, and 238 cash recycling machines, since their inception in Thoothukudi, Tamil Nadu, India.

With a continuous focus on MSME and the textile industry, Tamil Nadu, India’s fourth largest state, is among the fastest expanding states.

In Tamil Nadu, their deposits and advances portfolio accounted for 76.33 percent of their total business.

Growth in other Sates

They also place a strong emphasis on broadening their business into other high-growing regions of India, which will assist them expand their network and client base. They are located in 15 additional Indian states and four union territories, in addition to Tamil Nadu.

Aside from Tamil Nadu, they have a significant presence in Maharashtra, Gujarat, Karnataka, and Andhra Pradesh, with 90 offices, 123 ATMs, and 15 CRMs as of June 30, 2021.

From Fiscal 2019 to Fiscal 2021, they have continually grown their client base from roughly 4.42 million on March 31, 2019, to roughly 4.66 million on March 31, 2020, and to about 4.91 million on March 31, 2021, at a CAGR of 5.38 percent.

Tamilnad Mercantile Bank IPO

Tamilnad Mercantile Bank Limited, headquartered in Thoothukudi has submitted Draft Red Herring Prospectus(DRHP) to the Securities and Exchange Board of India(SEBI) for initial public offering (IPO) of 15,840,000 equity share on 04 September 2021.

The offer includes 15,827,495 equity shares fresh equity shares and There is an offer for sale (OFS) of 12,505 equity shares by the principal shareholders mentioned in the DRHP.

They are now waiting for approval from Securities and Exchange Board of India(SEBI) to float the initial public offering (IPO) in the market.

Financials Trends

Particulars	For the year/period ended ( in Cr.)
		31-Mar-21	31-Mar-20	31-Mar-19
Total Assets		47,527.17	42,758.80	40,532.80
Total Revenue		4,253.40	3,992.53	3,638.80
Profit After Tax		654.04	464.89	294.62

Basic and Diluted Earnings Per Share

Financial Period	Basic EPS (in INR)	Diluted EPS (in INR)	Weight
Financial Year 2021	42.34	42.34	3
Financial Year 2020	28.61	28.61	2
Financial Year 2019	18.14	18.14	1
Weighted Average	33.73	33.73

Objects of the Issue

• Prepayment / repayment of all or a portion of the outstanding borrowings of the company to be availed on consolidated basis.
• To meet common corporate objectives.

Basis of the offer

The following are among the basic features that go into determining the Offer Price:

• Strong history, a devoted customer base, and a commitment to enhancing the servicing structure.
• Significant footprint in Tamil Nadu, with a goal of expanding into other critical areas.
• Advancements in the MSME, agricultural, and retail sectors.
• With an emphasis on low-cost retail CASA, the deposit base has been steadily rising.
• Well administered bank with a board of directors and top leadership team with extensive experience.
• Asset quality, underwriting protocols, and risk management rules and procedures are all excellent.
• Reliable financial results.

Tamilnad Mercantile Bank IPO Peer Comparison

S. No.	Face Value	Company Name	PE
1	1	City Union Bank Limited	18.26
2	10	CSB Bank Limited	23.49
3	10	DCB Bank Limited	8.00
4	2	Federal Bank Limited	9.61
5	2	Karur Vysya Bank Limited	8.97
6	10	Karnataka Bank Limited	3.36
7	10	RBL Bank Limited	16.64
8	1	South Indian Bank Limited	27.71

Note:

All of the financial data for the listed industry peers referenced above is consolidated (unless otherwise stated) and derived from the respective company’s financial results for the year ending March 31, 2021 that were reported to stock exchanges.

Tamilnad Mercantile Bank IPO Details

IPO Opening Date	05 September 2022
IPO Closing Date	07 September 2022
Issue Type	Book Building
Face Value	10 per share
IPO Price	INR 500 to 525 per equity share
Market Lot	28 Shares
Min Amount	INR 14700
Listing At	BSE, NSE
Issue Size	INR 831.6 crore
Fresh Issue	15,827,495 Equity shares
Offer for Sale	12,505 Equity shares

Tamilnad Mercantile Bank IPO Date

Tamilnad Mercantile Bank IPO opening date is 05 September 2022, and the closing date is 07 September 2022. The Tamilnad Mercantile Bank issue may list in September 2022.

IPO Opening Date	05 September 2022
IPO Closing Date	07 September 2022
Basis of Allotment Date	13 September 2022
Initiation of Refunds	13 September 2022
Credit of Shares to Demat Account	14 September 2022
IPO Listing Date	15 September 2022

Basis of Allotment

Type	% of Offer	Basis of Allotment
Qualified Institutional Buyer	75	Roughly  equivalent
Non Institutional Investor	15	Roughly  equivalent
Retail	10	Minimum level of 1 lot, based on availability, for every shareholder.

Tamilnad Mercantile Bank IPO Allotment Status

Allotment of equity stocks subject to the Fresh Issue and transfer of the Promoter Selling Shareholders’ OFS Stocks to the winning Bidders subject to the Offer for Sale. Nevertheless, the status of the allotment has yet to be revealed.

Here, you can find the Allotment Status of Tamilnad Mercantile Bank IPO.

Tamilnad Mercantile Bank IPO GMP

Tamilnad Mercantile Bank IPO Grey Market Premium is 0.

Date	GMP (in Rs)	Subject to Sauda	Kostak (in Rs)
September 2022
September 2022
September 2022
September 2022
September 2022
September 2022
September 2022
September 2022
September 2022
September 2022
September 2022
September 2022

Tamilnad Mercantile Bank IPO Review

If you are looking for answer to your question that Tamilnad Mercantile Bank IPO is good or bad than you can apply for long term as bank is having very good track record.

Tamilnad Mercantile Bank IPO Risk

• Their former director has filed a petition suit in the Madras High Court, requesting that their Bank not proceed with the Offer.
• They will not be able to open additional branches until their are listed, and they must also acquire prior approval from the RBI to do so.
• The COVID-19 pandemic has had and may tend to have some negative consequences for their business, and the long-term ramifications of COVID-19 are unexpected and impossible to predict.
• An growth in their portfolio of nonperforming assets (NPAs) could have a material and negative impact on their business.
• They engage in fee-based activities, and their financial performance may be harmed if they are unable to collect revenue from these operations.

Other Threats

• They have obtained and may get multiple anonymous whistleblower complaints in the future, which could harm their firm.
• Negative outcomes in judicial processes may have an impact on their business, reputation, and financial results.
• They must maintain CRR, SLR, and capital adequacy ratios, and any change in these criteria might have a material and negative impact on their operations.
• Their contingent liabilities surpass their net worth, which could have a negative impact on their business if they materialise.
• Their industry is extremely competitive, and their ability to compete successfully is critical to their growth strategy.
• Unsecured debt instruments account for a percentage of their investing portfolio.

NPAs

Their risk management procedures are designed to increase their Bank’s risk adjusted rate of return by keeping credit exposure within permissible limits.

Their gross non-performing assets (GNPA) have decreased from 11,681.12 million in Fiscal 2019 to 10,209.77 million in Fiscal 2020 to 10,847.78 million in Fiscal 2021, a decrease of 4.32 percent. When compared to their peers, their bank recorded a lower GNPA in Fiscal 2021. (Source: CRISIL Report).

Their net non-performing assets (NNPA) have decreased from 6,365.19 million, or 2.40 percent, in Fiscal 2019 to 4,974.66 million, or 1.80 percent, in Fiscal 2020 and 6,138.26 million, or 1.98 percent, in Fiscal 2021.

Tamilnad Mercantile Bank IPO Brokerage views

• Yes Securities : Not Updated
• Choice Brokering: Not Updated
• Axis Securities: Not Updated
• IIFL Securities: Not Updated
• Trade swift: Not Updated
• Anand Rathi : Not Updated
• ICICI Securities: Not Updated

Tamilnad Mercantile Bank IPO Subscription Status

Date	Day	QIB	NII	Retail	Employees	Total Subscription
05 September 2022	1
06 September 2022	2
07 September 2022	3

Management

They are a well-run financial institution. Their Board of Directors and top management are made up of experienced banking, accounting, and auditing specialists. K.V. Rama Moorthy, their MD and CEO, has more than 40 years of banking knowledge.

Other members of their Board, such as their Independent Directors, have extensive experience, notably in the banking and financial industries. The RBI has also appointed two directors to their board of directors.

Their Board of Directors and senior management team have developed a deep understanding of industry-specific parts of the business and administration as a result of their combined expertise.

Principal Shareholders

In accordance with SEBI ICDR Regulations and the Companies Act of 2013, Their bank is expertly operated and does not have a recognizable promoter. As a result, in principles of the SEBI ICDR Regulations, no members constitute a “promoter group.”

Furthermore, they have no shareholders who own 15% or more of the voting rights in their Bank individually or collectively, nor do they have any persons with the authority to select directors to their Board of Directors.

Principal Shareholder’s Holding

Pre Issue Share Holding	–
Post Issue Share Holding