Anand Rathi IPO report on Tamilnad Mercantile Bank
Tamilnad Mercantile Bank Ltd is one of the oldest and leading old private sector banks in India with a history of almost 100 years. They offer a wide range of banking and financial services primarily to micro, small and medium enterprises (“MSME”), agricultural and retail customers (“RAM”). Since their incorporation, having head quartered at Thoothukudi, Tamil Nadu, India, they have built a strong presence in the state of Tamil Nadu, with 369 branches and 949 automated teller machines (“ATMs”) and 255 cash recycler machines (“CRMs”) as of March 31, 2022. The Bank also focus on diversifying their growth in other high growth regions of India which will help increase their network and client base. Other than Tamil Nadu, they are present in 15 other states and 4 union territories of India. Apart from Tamil Nadu, they have sizable presence in the states of Maharashtra, Gujarat, Karnataka, and Andhra Pradesh with presence across 90 branches and 125 ATMs and 18 CRMs as of March 31, 2022.
Valuation and Outlook
TMB is demanding a slight higher valuation when compared to its peers given that TMB is outperforming its peers in majority of financial parameters. Given the consistency in its performance over past periods and healthy return ratio, we recommend a "Subscribe-Long Term" rating to this IPO.
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