Tamilnad Mercantile Bank stock ends at moderate discount to issue price

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26 Aug, 2025 12:21

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Tamilnad Mercantile Bank closed the first trading session with a moderate losses on September 15, which was largely on expected lines. The lower-than-expected subscription to the initial public offer (IPO) was one of the key reasons but subdued market conditions further dented sentiment.

The stock opened at its issue price of Rs 510 and corrected up to Rs 484.50, a 5 percent discount to IPO price, which was also the lower circuit set by the exchanges. But it recovered losses in morning trade itself to climb up to Rs 519 and remained range-bound around issue price in rest of the session.

The stock closed at Rs 508.45, down third of a percent with volume of 2.24 lakh shares on the BSE.

On the NSE, the counter settled with 0.07 percent loss at Rs 509.65, with volume of 21.43 lakh shares.

"The precarious legal challenges, the lack of complete clarity on the management's long-term performance, and less than stellar subscription numbers are some of the reasons for its negative listing," Santosh Meena, Head of Research at Swastika Investmart said.

He advised that long-term investors should wait for some quarters to let the dust settle, and in the meanwhile, he suggests investors go for the existing listed banks where the management's track record and performance during multiple credit cycles are visible.

In short, large-sized banks and a few mid-sized banks are the best to ride on the upcoming credit and economic growth cycle, the expert believes.

Private sector lender Tamilnad Mercantile Bank has raised Rs 807.8 crore through its public issue, which will be utilised for augmenting tier-I capital base to meet future capital requirements. The price band was Rs 500-525 per share.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.