C The Tuticorin(TamilNadu)-based Tamilnad Mercantile Bank Ltd has filed a draft red herring prospectus with the Securities Exchange Board of India (Sebi) to raise funds through an initial public offering.

The proposed IPO will comprise a fresh issue of equity worth up to 15.84 million shares and an offer for sale (OFS) of up to 12,505 shares by its existing promoters and shareholders.

About 75 per cent of the net offer has been reserved for qualified institutional buyers (QIBs), 15 per cent is for allocation to non-institutional investors (NIIs), and the remaining 10 per cent will be available for retail investors.

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.

Axis Capital, Motilal Oswal Investment Advisors and SBI Capital Markets are the book running lead managers for the IPO. Link Intime India is the registrar for the issue.

For FY21, the bank's net profit stood at ₹603 crore as compared to ₹408 crore in FY20. Its gross non-performing assets (NPAs) were at 3.44% against 3.62% a year ago. Net NPA stood at 1.98% versus 1.8% last year. Its CASA ratio increased to 28.52% from 25.85%.

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.

It had 4.18 million customers in Tamil Nadu, which accounted for about 85 per cent of its total customer base. The bank also has a presence in Gujarat, Maharashtra, Karnataka and Andhra Pradesh.

As of June 2021, TMB had 509 branches, of which 106 were in rural, 247 in semi-urban, 80 in urban and 76 in big cities.

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