IGI Logo

Tamilnad Mercantile Bank Limited - SUBSCRIBE

Company Background

Tamilnad Mercantile Bank (“TMB”) was incorporated on May 11, 1921. TMB, headquartered at Thoothukudi (Tamil Nadu, India), is one of the oldest and leading old private sector banks in India, with a history of close to 100 years. The bank reported deposits of Rs.44,930 crore and advances of Rs.33,490 crore as of March 2022. It offers an array of banking and financial services to retail customers, micro, small, and medium enterprises (MSMEs), and more. As of March 31, 2022, they have 509 branches, of which 106 branches are in rural, 247 in semi-urban, 80 in urban and 76 in metropolitan centers. TMB has built a strong presence in the state of Tamil Nadu, with 369 branches and 949 automated teller machines (“ATMs”) and 255 cash recycler machines (“CRMs”), 91 E-Lobbies, 3,939 PoS as of March 31, 2022.

Issue Details: The offer comprises fresh issue of 1.58Cr equity shares to raise Rs.831.60 cr.

Issue Objectives :

1) To augment the bank’s Tier – 1 capital base to meet the future capital requirements.

2) To receive the benefits of listing the shares on the stock exchanges.

Outlook and Valuation

TMB is one of the oldest and leading private sectors in India. In the last three years, the company has generated strong revenue and margin expansion. Due to RBI's direction for listing, its branch expansion plan was on hold, but once it gets listed, it will expand its network. TMB can be a good investment avenue owing to its better growth with healthy asset quality, robust risk management system, equipped with basic retail banking infrastructure, and sizeable market to grow. However, Pending legal matters (refer to risk factors at the end of the report) may impact TMB if the verdict goes against the bank. At the upper price band of Rs.525/-, stock is priced at 1.35x its FY22 book value (based on fully diluted post issue equity). We recommend subscribing to the issue from a long term perspective.

To Read Complete Report & Disclaimer Click Here

Please refer disclaimer at www.investmentz.com/disclaimer
SEBI Registration number is INZ000186336

Views express by all participants are for information & academic purpose only. Kindly read disclaimer before referring below views. Click Here For Disclaimer