Tamilnad Mercantile Bank IPO – Should you Invest or Avoid?

Tamilnad Mercantile Bank IPO– This will begin accepting subscriptions on September 5, 2022. With a 100-year existence, Tamilnad Mercantile Bank is one of India’s oldest and most prestigious private sector banks. In the last three years, this bank has experienced significant revenue and margin increase. Should you make an investment in the initial public offering of Tamilnad Mercantile Bank? What potential risks exist with this IPO? We would give a thorough analysis of TMB IPO Review in this article.

Tamilnad Mercantile Bank IPO

About Tamilnad Mercantile Bank Limited

With a history spanning more than a century, this bank is among India’s oldest and most prestigious old private sector institutions.

They cater to retail, agricultural, small and medium businesses, and micro, small, and medium companies with a comprehensive range of banking and financial services.

It has 509 locations, of which 106 are in rural areas, 247 in semi-urban areas, 80 are in urban areas, and 76 are in metropolitan areas.

As of Mar. 22, it has a total of 5.08 million customers.

Tamilnad Mercantile Bank IPO (TMB IPO) – Dates, Details, Size and Price Band

IPO Opening Date 05-Sep-22
IPO Closing Date 07-Sep-22
Issue Type Book Built Issue IPO
Face Value Rs 10 per equity share
IPO Price band Rs 500 to Rs 525 per equity share
Lot Size 28 Shares
Min Order Quantity 28 Shares
Listing at BSE and NSE
Total Issue Size Rs. 831.6 Crores

What are the competitive strengths of Tamilnad Mercantile Bank Limited?

1)Bank has a long history, a devoted clientele, and a commitment to enhancing the servicing infrastructure.
2) It has a significant presence in Tamil Nadu and is working to expand there as well as in other key areas.

3) Developments with an emphasis on the MSME, agricultural, and retail sectors

4) It focuses on low-cost retail CASA and has a steadily expanding deposit base.

5) A skilled senior management team and board of directors professionally administer the bank.

6) The bank has solid risk management policies and practises, as well as strong underwriting practises and asset quality.

7) It consistently performs financially

What are the Objects of the Tamilnad Mercantile Bank IPO Offer?

The  IPO Size is  Rs. 831.6 Crore Tamilnad Mercantile Bank IPO would be used for the following purposes:

1- To increase the tier-I capital base in order to satisfy future capital needs.
2-Provide issue costs.
3- Obtain listing advantages

Who are the promoters of Tamilnad Mercantile Bank Limited?

Tamilnadu Merchantile Bank is a professionally managed bank and does not have an identifiable promoter

Key Performance Indicators in Tamilnad Mercantile Bank Limited

Here are the total assets, revenues and profits of the company in the last 3 years.

                                                Financial Year ending / Period ending (Amt in Crores)
Particulars FY20 FY21 FY22
Total Assets 42,758.8 47,527.2 52,858.5
Revenues 3,992.5 4,253.4 4,656.4
Profit After Tax 464.9 654.0 901.9
Profit % 11.64% 15.38% 19.37%

Positive Elements in  Tamilnad Mercantile Bank IPO

The main reasons for investing in this IPO are listed below.

1) With a history spanning more than 100 years, TMB is one of India’s oldest private sector banks.

2) The business has a solid and devoted customer base as well as a significant presence in Tamil Nadu and other important geographic areas.

3) Over the last three years, the company’s revenue increased significantly. From Rs. 3.992.5 crores in FY20 to Rs. 4,656.4 crores in FY22, its revenues increased.

4) Company has experienced great profitability increase in the recent 3 years. From Rs 464.9 Crores in FY20 to Rs 901.9 Crores in FY22, its margins increased.

Tamilnad Mercantile Bank IPO Dates – Subscription, Allotment and Listing Dates

Offer Open 05-Sep-22
Offer close 07-Sep-22
Finalization of Allotment 12-Sep-22
Initiation of Refunds 13-Sep-22
Credit to Demat Account 14-Sep-22
IPO Shares Listing Date 15-Sep-22


Risk Elements  of investing in Tamilnad Mercantile Bank IPO

1) There are ongoing legal procedures involving 53.7 million equity shares, or 37.3% of the paid-up capital of the bank, that are pending in various courts and regulatory agencies, including the RBI, among others. Any negative outcome may have an impact on the bank’s operations and business.

2) The Bank has received and will continue to receive numerous anonymous whistleblower allegations, which might harm the bank’s reputation and impair business.

3) The bank’s former director filed a writ petition with the Madras High Court to stop it from making the offer after receiving numerous complaints from former shareholders and directors about the disclosures in the DRHP and invitations to participate in the offer for sale, all of which could harm them by hindering their ability to retain clients, subjecting them to significant legal liability, damaging their reputations, and preventing them from proceeding.

4) The Bank has a regional focus in Tamil Nadu, which is in southern India. The outcomes of the operations may be impacted by any unfavourable changes in the state’s economic, political, or geographic situations.

How to buy Tamilnad Mercantile Bank IPO online through Zerodha?

You can login to your demat account, visit the IPO section and apply for this IPO during the subscription dates.

You can also apply this IPO on Zerodha. If you do not have Zerodha account, sign-up here and proceed to the next step.

Zerodha customers can apply in this IPO by login into Zerodha Console submitting an IPO application form.

Follow below steps to apply this IPO in Zerodha platform:

1) Visit the Zerodha portal and login to the console.

2) Go to Portfolio and click the IPOs link.

3) Visit ‘Tamilnad Mercantile Bank Limited IPO’ row and click the ‘Bid’ button.

4) Enter your UPI ID, Qty and the Price which you want to bid.

5) Click on ‘Submit’ IPO application form.

6) Visit the UPI App (net banking or BHIM) to approve the mandate.


Tamilnad Mercantile Bank IPO Review – Should you Invest or not?

Tamilnad Mercantile Bank Limited (TMB) is one of the oldest and leading private sectors in India. Company generated strong revenue and margin growth in the last 3 years.Investors can subscribe to an initial public offering (IPO) for a medium- to long-term perspective after taking into account all of the positive and negative considerations mentioned above. The possibility of listing gains for investors exists.

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