The Tuticorin-based Tamilnad Mercantile Bank Ltd, an old private sector bank, has filed a draft red herring prospectus with the Securities Exchange Board of India to raise funds through an initial public offering.

The proposed issue will consist of initial public offering of up to 1.584 crore equity shares of face value of ₹ 10 each.

While the IPO comprises a fresh issue of 1.5827 crore shares, it also has an offer for sale of up to 12,505 shares from existing shareholders. The offer will constitute 10 per cent of the post-offer paid-up equity share capital. About 75 per cent of the net offer has been reserved for qualified institutional buyers (QIBs) while 15 per cent of the issue will be for non-institutional investors (NIIs) and the remaining 10 per cent for retail investors.

To boost capital base

Proceeds from the IPO will be used for augmenting the lender’s tier I capital base. The company had said that it was planning to raise more than ₹1,000 crore with an IPO.

The equity shares are proposed to be listed on BSE and NSE. Axis Capital, Motilal Oswal Investment Advisors and SBI Capital Markets are book running lead managers for the IPO. Link Intime India is registrar for the issue.

About TMB

TMB offers primarily micro, small and medium enterprises (MSME), agricultural and retail customers and for FY21, net profit stood at ₹603 crore as compared to ₹408 crore in FY20. Its gross non-performing assets (NPAs) were at 3.44 per cent against 3.62 per cent a year ago. Net NPA stood at 1.98 per cent versus 1.8 per cent last year.

Its CASA ratio increased to 28.52 per cent from 25.85 per cent. Total advances stood at ₹31,541 crore in FY21 from ₹28,236 crore FY20. Total deposits stood at ₹40,970 crore (₹36,825 crore). Its total business was at ₹72,511 crore, up 11 per cent from ₹65,061 crore in FY20.

As of June, TMB had 509 branches, of which 106 were in rural, 247 in semi-urban, 80 in urban and 76 in big cities. Their overall customer base was about 4.93 million.

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