TMB sets price band of Rs 500-525 a share: IPO to open on September 5

Offer consists of fresh issue of 15.8 mn equity shares; bank is expected to raise Rs 832 crore at the upper end of the band; stock will start trading on Sept 15

Tuticorin-based Tamilnad Mercantile Bank (TMB) has set a price band of Rs 500-525 a share for its Rs 800 crore initial public offering (IPO) that opens on September 5 and closes on September 7.

Axis Capital, Motilal Oswal, SBI Capital Markets are the lead managers to the issue. The IPO consists of a fresh issue of 15.8 million equity shares. At the upper end of the price band, the bank is expected to raise around Rs 832 crore. The stock will start trading on September 15.

Of the 509 branches of TMB, 369 are in Tamil Nadu itself. The state contributes to about 70 per cent of the bank's business. Out of the 509 branches (106 rural, 247 semi-urban, 80 urban and 76 in metropolitan), only around 40-50 are reportedly making losses. About 80 per cent of the overall customer base of 5 million consists of those who have been associated with the bank for over five years. The lender said 88.14 per cent of its asset size is being contributed by the retail, agric and micro small and medium enterprises (RAM) segment.  

TMB’s gross non-performing assets in 2021-22 was seen at 1.69 percent  as against 3.44 percent in 2020-21. On the other hand, the bank’s net NPA was at 0.95 percent as compared to 1.98 percent in 2020-21. During the year FY22, net profit increased by 36 per cent to Rs 822 crore as compared to Rs 603 crore during 2020-21. During the last financial year, the bank’s total deposits increased to Rs 44,933.12 crore up from Rs 40,970.42 crore. Similarly, its advances were seen at Rs 33,491.54 crore, up from Rs 31,069.60 crore during a year ago.