TMB to raise Rs 1000 crore

Tamilnad Mercantile Bank (TMB) is targeting a business of Rs 50,000 crore by 2012-13 for which it would require around Rs 1,000 crore capital.

Speaking to Business Standard on the sidelines of its 86th and 87th annual general meeting here on Wednesday, G Nagamal Reddy, managing director and chief executive officer, TMB, said the bank would look at raising the proposed money through IPO, qualified institutional placement (QIP), Tier II bonds or rights issue. “This will be decided in the coming board meetings,” he added.

The bank’s current networth is around Rs 1,000 crore. It did a business of Rs 16,137 crore as on March 31, 2009.

“TMB is a small bank and to become a medium-sized bank we have to go for an IPO,” said Reddy, adding they needed to improve the paid-up capital, which is currently at around Rs 28.45 lakh.

The bank is also planning to appoint a consultant to initiate re-engineering processes including human resource, marketing and expansion.

It had applied for 40 branch licences — it currently has 215 branches —with the Reserve Bank of India. Reddy said the bank saw good potential in Mumbai, Delhi, Kolkata and Gujarat and would focus on these markets as part of the expansion plan. “We will enter Madhya Pradesh and Chhattisgarh next year and are planning to recruit 500 clerks,” he said.

The Tuticorin-based, largely seen as community bank, declared a dividend of Rs 500 per share (face value of Rs 10) for the fiscal 2007-08 and Rs 600 per share for 2008-09.