Tamilnad Mercantile Bank to launch Rs 830-cr IPO on September 5; check price band, lot size, bidding details

Tamilnad Mercantile Bank to launch Rs 830-cr IPO on September 5; check price band, lot size, bidding details

Tamilnad Mercantile Bank’s IPO will open for subscription on 5th September, at a price band of Rs 500-525 apiece. The public issue will close on 7th September. The IPO is entirely a fresh issue of up to 1.58 crore shares with a face value of Rs 10 each, aggregating to Rs 831.6 crore, according to RHP. The lead managers to the issue include Axis Capital, Motilal Oswal, and SBI Capital Markets. Link Intime India is the registrar to the issue. Upon successful listing, Tamilnad Mercantile Bank will join the likes of City Union Bank, CSB Bank, DCB Bank, Federal Bank, Karur Vysya Bank, Karnataka Bank, RBL Bank, and South Indian Bank.

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Investors can make bids for a minimum of 28 equity shares and in multiples thereafter. The anchor book bidding will start on September 2. The average industry peer group price/earning (P/E) ratio stood at 11.85x. Up to 75 per cent of the offer will be kept aside for Qualified Institutional Investors (QIBs), not more than 15 per cent for Non-Institutional Investors (NIIs). While the remaining 10 per cent of the offer will be reserved for the retail investors.

IPO proceeds to be used for augmenting its Tier–I capital base

Tamilnad Mercantile Bank has planned to utilise the net proceeds towards augmenting its Tier–I capital base to meet its future capital requirements. Further, the gross proceeds from the offer will also be used towards meeting the expenses in relation to the offer. Tamilnad Mercantile Bank is headquartered at Thoothukudi (Tamil Nadu, India), and is among one of the oldest private sector banks in India, with a history of close to 100 years. TMB’s deposits increased at a healthy CAGR of 10.46%. The company’s current account and savings account deposits to total deposits are also competitive among peers at 30.50%.

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Tamilnad Mercantile Bank has introduced various alternate banking channels such as ATMs, CRMs, internet banking, mobile banking, E-Lobbies, point of sales (PoS), banking and debit and credit cards. It has also introduced internet banking to their customers in 2008 through ‘TMB-Econnect’ and utility payment facility to enable customers to pay bills for cable operators/DTH operators, electricity services, mobile phone utility services, other utilities and tax services.