Tamilnad Mercantile Bank IPO: Latest GMP on final day of subscription


The initial public offering (IPO) of Tamilnad Mercantile Bank got subscribed 1.53 times on Tuesday, day two of the subscription, after getting fully subscribed in early trade. The three-day issue will conclude on Wednesday. The price band is ₹500-525 per share. The The Tuticorin-based private sector lender on Friday said it has mobilised a little over ₹363 crore from anchor investors ahead of its share sale.

As of 10:30 am on final day of the issue, it has been subscribed 1.65x with retail category booked 4.07x, NIIs 1.39x and QIBs 0.98x, showed the BSE data.

As per market observers, Tamilnad Mercantile Bank shares are available at a premium (GMP) of ₹25 in the grey market today. The shares of the company are expected to list on stock exchanges BSE and NSE on Thursday, September 15, 2022.

Tamilnad Mercantile Bank IPO is a fresh issue of 1.58 crore equity shares. At the upper end of the price band, the bank is expected to mobilise ₹831.6 crore through its initial share sale. The bank proposes to utilise the proceeds from the issue for augmenting its Tier–I capital base to meet future capital requirements.

Tamilnad Mercantile Bank (TMB) is one of the oldest private sector banks with a history of 101 years, having been established in 1921 as Nadar Bank. The bank offers a wide range of services primarily to micro, small and medium enterprises, agricultural and retail customers.

Yes Securities has given a Subscribe rating to the IPO as it finds the asset quality outcomes of TMB having reached a stage which can be regarded as stable and benign, the loan growth performance and outlook of TMB as reasonable, the operating expense control outcomes to be reasonable as well while cost of deposits is relatively on the higher side, the net interest margin outcome is healthy.

“Company’s consolidated revenue growth of 5% over FY20-22 but interest/discount on advances was of 4.1% over FY20-22. It It will be challenging for the bank to grow its business in Tamil Naidu as well as new geographics. Looking at the current valuation of price to book of 1.4 times we believe that near term positive has been priced in the IPO price. Thus, we have a NEUTRAL rating on the issue,” said brokerage Angel One.


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