Ninety-nine-year old Tamilnad Mercantile Bank (TMB) is to again seek shareholders’ approval to become a public listed entity. It had done so in 2016, too, at its 93rd annual general meeting (AGM). However, the shareholders, largely from the Nadar community, rejected the proposal for an Initial Public Offer (IPO) of equity by a majority.
The bank has since not held any AGM and is now scheduled, on April 9, to hold its 94th to 97th AGMS all together, for years 2015-16 to 2018-19. This is a sequel to last month’s high court order, which allowed the conduct of all the pending AGMs, subject to specified conditions.
TMB has 20,600 shareholders. A majority reportedly voted against an IPO last time, so that the door is not opened to “outsiders” (non-Nadars). Their argument is TMB was meant for Nadars and should be owned by Nadars. Its earlier name was Nadar Bank.
The community has made significant strides through an emphasis on both education and entrepreneurship. The existing top management is from the same community. It had earlier said it was educating the shareholders on the need for additional funds, for both faster growth and for the benefit of all shareholders. If share value rises (with an IPO), exit routes will be available; it is currently not easy to sell the shares, it had said.