Tamilnad Mercantile Bank Files DRHP to Go Public

India’s oldest private sector bank, Tamilnad Mercantile Bank, has filed a draft red herring prospectus with SEBI to go public. The financial institution has a history of 100 years, and it was formed by the Nadar community in the state of Tamil Nadu.

As per the DRHP, the bank is planning to issue 1.58 crore new equity shares, along with an OFS. The offer for sale will comprise 12,505 shares from the current promoters and include 5,000 shares each from Priya Ranjan and D Prem Palanivel. It will also include 1000 equity shares from Prabhakar Mahadeo Bobde, 500 shares each from Subramanian Venkateshwaran Iyer and Malliga Rani, and 505 equity shares from Narasimhan Krishnamurthy.

Details of Tamilnad Mercantile Bank IPO

The issue size and timeline of this public issue are not available yet.

However, addressing the media in April, the Chief Executive Officer and Managing Director KV Rama Moorthy mentioned that Tamilnad Mercantile Bank is planning to raise about Rs. 1000 to 1200 crores via this public issue.

Furthermore, the financial institution has appointed SBI Capital Markets, Axis Capital, and Motilal Oswal Investment Advisors as its lead managers.

The gatherings from this public issue will be used to improve Tamilnad Mercantile Bank’s working capital and its adequacy ratio. Till 31 March, this ratio was 17.93% against the regulatory requirement of 10.875%.

Further information on this public issue will be updated as they are available; refer to this space for more information.

Shareholding of Tamilnad Mercantile Bank

As is the case with different private lenders who are in operation for a long time, Tamilnad Mercantile Bank does not have any identifiable promoter, and its shareholding is dispersed. Moreover, those who are listed as the largest shareholders hold a maximum of 5% holding in the bank. Here is a list of the biggest stakeholders –

1. Robert and Ardis James Company Limited – 5%
2. Starship Equity Holdings Limited – 4.7%
3. Subcontinental Equities Limited – 4.6%
4. East River Holdings Limited – 3.7%
5. Swiss Re Investors (Mauritius) Limited – 3.6%

Financials of Tamilnad Mercantile Bank

As of the financial year 2021, the bank has registered a net profit of Rs. 603.3 crores. This is a 48% year-on-year jump. Additionally, the net interest income for the previous fiscal year has also improved 16.5% and stood at Rs. 1537.5 crores.

Furthermore, on 31 March 2021, the loan book of Tamilnad Mercantile Bank shows total lending of Rs. 31,541 crores. Also, the deposit book for the financial year of 2021 had a valuation of Rs. 40,970 crores.

Bottom Line

Tamilnad Mercantile Bank has been through its fair share of ups and downs. However, the financial institution is now performing steadily, and the previous financial year has been a positive one. So, if you are pondering a decision of applying for this public issue, it is ideal to go through its financials and then make a final decision.

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Frequently Asked Questions

1. What is the price band of Tamilnad Mercantile Bank IPO?

The price band of Tamilnad Mercantile Bank IPO is not available yet.

2. Is there any reservation for employees in Tamilnad Mercantile Bank IPO?

No details regarding employee reservations are available yet.

3. What is the current branch count of Tamilnad Mercantile Bank?

The current branch count of Tamilnad Mercantile Bank as of 30 June 2021 is 509.

4. What is the current customer base of Tamilnad Mercantile Bank?

Till 30 June 2021, Tamilnad Mercantile Bank had a customer base of about 4.93 million.