Tamilnad Mercantile Bank IPO subscribed 2.9x on strong retail interest

Response muted when compared to previous two IPOs; Lender to issue 15.84 million fresh shares via offering

The initial public offering (IPO) of Tamilnad Mercantile Bank (TMB) garnered nearly three times subscription. 
 

The qualified institutional buyer (QIB) segment of the issue was subscribed 1.62 times, high networth individual 2.94 times and retail portion was subscribed nearly 6.5 times. 

The response was muted when compared to previous two IPOs to hit the market. Based in Thoothukudi, Tamil Nadu, TMB is one of the country’s oldest private sector lenders. 

The bank had priced its shares at Rs 500-525 apiece in the IPO. It had allotted shares worth Rs 363 crore to anchor investors at Rs 510 apiece ahead of its IPO. 

TMB will issue 15.84 million fresh shares through the offering. At the top-end of the price band, the bank will be able to raise Rs 832 crore and will be valued at Rs 8,314 crore. 

TMB plans to use the IPO proceeds to augment its tier-I capital base. This will help it meet future capital requirements arising out of growth in the bank’s assets. It will also help ensure regulatory compliance around capital adequacy prescribed by the Reserve Bank of India. 

TMB had reported deposits of Rs 44,930 crore and advances of Rs 33,490 crore as on March 2022. TMB has a strong presence in Tamil Nadu with 369 branches. It logged a net profit of Rs 822 crore for the year ended March 2022.