Tamilnad Mercantile Bank IPO: Should you apply? Here’s what Anil Singhvi recommends | Full Timeline

Anil SInghvi views on Tamilnad Mercantile Bank IPO: The initial public offerings (IPO) of Tamilnad Mercantile Bank will open for subscription on Monday. The three-day Rs 831.6 crore IPO will conclude on September 7. The IPO, with a price band of Rs 500-525 per share, is a fresh issue of 1.58 crore equity shares. As much as 75 per cent of the issue has been reserved for qualified institutional investors, 15 per cent for the non-institutional investors and the remaining 10 per cent for retail investors. 

The Tuticorin-based bank proposes to utilise the proceeds from the issue for augmenting its Tier-I capital base to meet future capital requirements. 

Axis Capital Limited, Motilal Oswal Investment Advisors Limited and SBI Capital Markets Limited are the book running lead managers to the public issue. The equity shares are proposed to be listed on BSE and NSE. 

Ahead of Tamilnad Mercantile Bank IPO, Zee Business Managing Editor Anil Singhvi spoke about pros and cons of this issue and recommended what should investors do?  

Tamilnad Mercantile Bank IPO :आज से तमिलनाड मर्केंटाइल बैंक का IPO, प्राइस बैंड: ₹500-525/शेयर#TamilnadMercantileBank में क्या पॉजिटिव, क्या निगेटिव ⁉️

इश्यू को सब्सक्राइब करें या छोड़ दें?

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— Zee Business (@ZeeBusiness) September 5, 2022

Speaking of positives about the Tuticorin-based bank, Singhvi said the bank has strong asset quality and it also robust financials and net interest margin (NIM). 

However, the market guru recommended avoiding the issue. He said the bank is engaged in too many litigations and is always under regulator’s scrutiny.  

“Valuation-wise the IPO is not very attractive. Avoid this issue as there are many better options available among listed banks,” the expert added.  

Earlier, ahead of the opening of the issue, the private sector lender on Friday raised a little over Rs 363 crore from anchor investors days before its Initial Public Offering (IPO). Societe Generale, Nomura Singapore, Bajaj Allianz Life Insurance Company, Max Life Insurance Company, Kotak Mahindra Life Insurance Company and Moneyewise Financial Services are among the anchor investors. 

The company has decided to allocate 71.28 lakh equity shares to anchor investors at Rs 510 apiece, aggregating the transaction size to Rs 363.53 crore, according to a circular uploaded on the BSE website. 

One of the oldest private sector banks in the country with a history of almost 100 years, Tamilnad Mercantile Bank offers a wide range of banking and financial services primarily to Micro, Small and Medium Enterprises (MSME), agricultural and retail customers. 

As per the company, the bank has 509 branches, of which, 106 branches are in rural, 247 in semi-urban, 80 in urban and 76 in metropolitan centres as of March 2022. It had a customer base of around 5.08 million as of March 2022. Of which, nearly 80 per cent comprised customers who were associated with the bank for more than five years. 

Tamilnad Mercantile Bank IPO Full Timeline 

Tamilnad Mercantile Bank IPO start date: September 5, 2022 

Tamilnad Mercantile Bank IPO closing date: September 7, 2022 

Tamilnad Mercantile Bank IPO allotment: September 12, 2022 

Tamilnad Mercantile Bank IPO refund initiation: September 13, 2022 

Tamilnad Mercantile Bank IPO allotment finalisation: September 14, 2022 

Tamilnad Mercantile Bank IPO listing date: September 15, 2022 

Note: Dates as per discount broker Upstox