| IPO date | 05 Sep 2022 – 07 Sep 2022 |
| Listing date | 15 Sep 2022 |
| Price range | 500 – 525 |
| Minimum order quantity | 28 |
| (D)RHP | View |
With a nearly 100-year existence, Tamilnad Mercantile Bank Limited is one of India’s oldest and most prestigious private sector banks. They provide a comprehensive range of banking and financial services primarily to retail, agricultural, and micro, small, and medium-sized businesses (MSME) clients (RAM). The bank had 509 locations as of March 31, 2022, with 106 in rural areas, 247 in semi-urban areas, 80 in urban areas, and 76 in metropolitan areas.
As of March 31, 2022, Tamilnad Mercantile Bank had roughly 5.08 million customers overall. Of those, 4.05 million (or 79.78%) have been with the bank for more than five years and have contributed Rs. 350,142.39 million (or 77.93%) in deposits.
As per the CRISIL Report, it had the second highest Net Profit for Fiscal 2022 amongst its peers, and its Return on Assets was also higher at 1.66% compared to a median of 0.80% for Peers for Fiscal 2022.
The public offer of Tamilnad Mercantile Bank comprises a fresh issue of 1.58 crore equity shares aggregating up to Rs. 831.6 crores at the upper end of the price band.
Financial Snapshot
| Financial Year Ended | Revenue (₹ Crores) | Profit for the period (₹ Crores) | EPS (₹) |
| March 2020 | 3,992.52 | 464.89 | 28.61 |
| March 2021 | 4253.40 | 654.04 | 42.34 |
| March 2022 | 4,656.44 | 901.90 | 57.67 |
IPO Schedule
| Issue Period | 5th September to 7th September 2022 |
| Finalization of Allotment | 12th September 2022 |
| Initiation of Refunds | 13th September 2022 |
| Credit of Shares | 14th September 2022 |
| Date of Listing | 15th September 2022 |
| Mandate end date | 23rd September 2022 |
| Anchor Investors Lock-In End Date | 7th October 2022 |
Why should you invest in the Tamilnad Mercantile Bank IPO?
The top two reasons are listed below:
- Dependable risk management methods and effective underwriting procedures
- Solid 100-year history and a 4.91 million-strong client base that has grown by 5% CAGR over the last three years.
Particulars | FY21 | FY20 | FY19 |
|---|---|---|---|
Revenue (Cr) | 3,635.79 | 3,992.52 | 4253.4 |
Profit (Cr) | 294.61 | 464.89 | 654.04 |
EPS (INR) | 18.14 | 28.61 | 28.61 |
Highlights of the Tamilnad Mercantile Bank
The digital and branch transactions increased by a CAGR of 47% in the last 3 years
The treasury portfolio increased at CAGR of 13.27% from ₹ 91,924.51 million as of March 31, 2019 to ₹ 117,948.80 million as of March 31, 2022
SWOT analysis of the IPO of Tamilnad Mercantile Bank
Strength | Opportunity | Weakness | Threat |
|---|---|---|---|
The bank reported second highest Net Profit for the Fiscal 2021 at 6.03 billion lagging only behind Federal Bank. | Banking sector in india is under penetrated which provides immense opportunities for banks and financial institutes to grow | Around 37% of paid up equity share capital is subjected to outstanding legal proceedings | If India’s debt rating by an international rating agency is downgraded could have a negative impact on performance of Tamilnad mercantile bank |
Net non performing assets has been lower than its peers | The RBI along with the Center and the state governments is taking measures to improve demand for housing loans | The bank cannot open new branches unless it is listed and also require to obtain prior permission from the RBI | Another Pandemic like COVID can adversely impact the banks cash flows and growth |
Tamilnad mercantile bank also had second highest provision coverage ratio among its peers | It is dependent on Retail, MSME and Agricultural customers and any adverse developments in these segments could adversely growth strategies | Increase in inflation might reduced the revenue for the Tamilnad mercantile bank | |
Current accounts savings accounts (CASA) has grown by a CAGR of 16% in last 3 years | The bank’s lion share of revenue is from tamil nadu, any political / economic instability in the state can disrupt the business | Any slowdown or perceived slowdown in the Indian eco nomy, could adversely affect banking business. | |
Banking has been a fundamentally high competition business, the penetration of competitors in Tamilnad mercantile banks locations can reduce the market share and eventually revenue |
Competitive Analysis/ Market Peers
The performance of Tamilnad Mercantiles peer banks is summarised here.
Peer | Revenue( In Mn) | P/E |
|---|---|---|
Tamilnad Mercantile bank | 42,534 | NA |
City Union Bank Limited | 48,394 | 18.26 |
CSB Bank Limited | 22,731 | 23.49 |
DCB bank ltd | 39,167 | 8.00 |
Federal Bank Limited | 1,62,719 | 9.61 |
Karur Vysya Bank Limited | 65,270 | 8.97 |
Karnataka Bank Limited | 77,274 | 3.36 |
RBL Bank Limited | 1,06,098 | 16.64 |
South Indian Bank Limited | 84,909 | 27.71 |
FAQS
The 1,58,27,495 new shares in the Tamilnad Mercantile Bank IPO are offered for sale, together with 12,505 more shares.
On September 12, 2022, shares in Tamilnad Mercantile Bank will be allocated.
28 shares make up each lot in the IPO of Tamilnad Mercantile Bank.
On September 5, 2022, subscriptions for the IPO of Tamilnad Mercantile Bank will be accepted.
Retail investors are eligible to apply for at least one lot.
The IPO date for Tamilnad Mercantile Bank is not disclosed.
The shares will be delivered to your Demat account.
The UPI requirement must be approved in order for your application to be accepted; otherwise, it will be denied. Not to worry! The payment demand must typically be accepted within T+1 weeks.
Tamilnad Mercantile Bank’s MD and CEO is K. V. Rama Moorthy.
How do I apply to the Tamilnad Mercantile Bank Limited IPO?
You can apply for the Tamilnad Mercantile Bank Limited IPO using any supported UPI app by following two steps:
- Enter your bid on Kite
- Accept UPI mandate on your phone
On acceptance of the mandate, the bid amount will get blocked in your bank account.
Where can I find the Tamilnad Mercantile Bank Limited IPO's allotment status?
You can check the allotment status for the Tamilnad Mercantile Bank Limited IPO on the website of the Registrar and Transfer agent.
Alternatively, you can also check the allotment status on the NSE website.