Tamilnad Mercantile Bank sets price band of Rs 500-525 a share

Tamilnad Mercantile Bank has set a price band of Rs 500-525 a share for its initial public offering. Earlier, the firm said its IPO will open for subscription on September 5 and close on September 7.

The IPO is a fresh issue of 1.58 crore shares. On the upper end of the price band, the firm will raise around Rs 831.60 crore from the issue. Axis Capital, Motilal Oswal, SBI Capital Markets are the lead managers to the issue.

The anchor book bidding will start on September 2. Shares will be allotted to dematerialised accounts of successful investors on September 14 and stock will make its market debut on September 15.

One of the oldest private sector banks in the country, Tamilnad Mercantile Bank offers a range of banking and financial services primarily to micro, small and medium enterprises, agricultural and retail customers.

The Thoothukudi (formerly Tuticorin)-based private lender plans to utilise the proceeds towards augmenting its tier–I capital base to meet its capital requirements.

As of March 31, 2022, the lender is required to maintain a minimum CRAR of 11.5 percent. Its tier I capital adequacy ratio was at 20.46 percent and Tier-I capital is Rs 5231.77 crore.

For FY22, the bank’s gross non-performing assets were at 1.69 percent, against 3.44 percent in the previous year. Net NPAs were at 0.95 percent versus 1.98 percent in the year before.

Its CASA ratio, the ratio of deposits in current account and savings account to the total deposits of the bank, improved to 30.5 percent in FY22 from 28.52 percent in the previous ratio.

Total deposits rose to Rs 44,933.12 crore from Rs 40,970.42 crore, while advances were at Rs 33,491.54 crore, up from Rs 31,069.60 crore in the previous year.

Net profit for the year rose 36 percent to Rs 821.91 crore from Rs 603.33 crore a year ago. Net interest income increased 18 percent to Rs 1815.23 crore.

As of March 31, 2022, the lender had 509 branches, 106 of which were in rural, 247 in semi-urban, 80 in urban and 76 in metropolitan centres.

Earlier this month, two recent IPOs got a good response from investors. Syrma SGS Technology, which listed on August 25, was subscribed nearly 35 times. Airport service aggregator DreamFolks Services IPO was subscribed 56.68 times.