Tamilnad Mercantile Bank eyes Rs 1,000-crore IPO by Nov-Dec 2021

The lender's FY21 net profit rose 48% to Rs 603 cr

Private lender Tamilnad Mercantile Bank's (TMB) is planning an Initial Public Offering ( IPO) of about Rs 1,000 crore by November-December 2021. The IPO will involve combination of fresh capital plus sale of existing shares.

The shareholders of the unlisted South-based private bank have already given nod for IPO. Bank would work file prospectus with Securities and Exchange Board of India, said K V Rama Moorthy, managing director and chief executive, TMB.

The book value of bank is Rs 321 per share and capital adequacy was 18.94 per cent in March 2021, up from 16.74 per cent in March 2020.

Meanwhile, the lender posted 48 per cent rise in net profit at Rs 603.3 crore for financial year ended March 2021 (FY21) as against Rs 407.69 crore in year ended March 2020 (FY20).

It posted 16.52 per cent rise in net interest income ( NII) at Rs 1,537.5 crore in FY21 from Rs 1,319.51 crore in FY20. Its non-interest income stood at Rs 644.17 crore  as against Rs 526.45 crore in FY20, showing a growth of 22.36 per cent.

The advances were up by 11.71 per cent at Rs 31,541.81 crore in March 2021. The agriculture advances increased to Rs 8,645.66 crore from Rs 6,993.90 crore. Its MSME loan book expanded by 18.35 per cent to Rs 12,036.34 crore and retail porrfolio by 19.38 per cent to Rs 6,496.11 crore.

Rama Moorthy said the bank is looking at 15 per cent growth in advances in FY22.

The deposits grew by 11.27 per cent to Rs 40,970.42 crore in FY21 from Rs 36,825 crore in FY20. It is targeting a growth of 10-12 per cent growth in deposits and increase share of low cost deposits - savings accounts and current accounts - beyound 30 per cent from present 28 per cent, he added.

The gross Non-Performing Assets (NPAs) declined to 3.44 per cent in March 2021 from 3.62 per cent in FY20. However, the net NPAs were up at 1.98 per cent in March 2021 from 1.8 per cent in March 2020.

The Provision Coverage Ratio dipped to 79.53 per cent in FY21 from 80.75 per cent a year ago. In the wake of second Covid wave, the lender made additional standard asset provision of Rs 50 crore.