Tamilnad Mercantile Bank files DRHP for IPO with Sebi
New Delhi: South India-focused Tamilnad Mercantile Bank (TMB) has filed its draft red herring prospectus (DRHP) with markets regulator Sebi to raise funds via its initial public offering (IPO).
According to the DRHP, the company will issue 1,58,40,000 equity shares of face value of Rs 10 each. The lender is expected to raise up to Rs 1,000 crore from the primary market.
The offer will consist of issuance of 1,58,27,495 fresh equity shares and existing shareholders will offload 12,505 equity shares from their stake through offer-for sale (OFS).
Investors participating in OFS include D. Prem Palanivel (up to 5,000 equity shares), Priya Rajan (up to 5,000 equity shares), Prabhakar Mahadeo Bobde (up to 1,000 equity shares), Narasimhan Krishnamurthy (up to 505 equity shares), M. Malliga Rani (up to 500 equity shares) and Subramanian Venkiteshwaran Iyer (up to 500 equity shares).
Tuticorin-based Tamilnad Mercantile Bank is a professionally managed lender and does not have an identifiable promoter.
75 per cent of the net offer has been reserved for qualified institutional buyers (QIBs). 15 per cent of the net offer is for allocation to non-institutional investors (NIIs) and remaining 10 per cent shall be available for allocation to retail bidders.
TMB’s net profit grew by 48 per cent to Rs 603 crore in the financial year 2020-21 from Rs 408 crore in the year ago period. The deposits grew by 11 per cent to Rs 40,970 crore.
The lender had earlier announced an interim dividend of 50 per cent or Rs 5 apiece. It reported a fall in gross NPAs in FY 2020-21 to 3.44 per cent from 3.62 per cent in FY 2019-20.
Axis Capital, Motilal Oswal Investment Advisors and SBI Capital Markets have been appointed as book running lead managers for the IPO. Link Intime India has been appointed as the registrar for the issue.
Tamilnad Mercantile Bank Limited (TMB) is a bank headquartered at Thoothukudi, Tamil Nadu, India. TMB was founded in 1921 as the Nadar Bank, but changed its name to Tamilnad Mercantile Bank in November 1962 to widen its appeal beyond the Nadar community. For the financial year 2018–2019, the bank reported a net profit of ₹ 2585 million. The bank currently has 509 full branches throughout India, 12 Regional offices and eleven Extension Counters, six central processing centres, one Service Branch, four Currency Chests, 19 eLobby centres and 1094 Automated Teller Machines (ATM). The bank has been expanding its footprint all over India.
TMB was rated as the fastest growing Private Sector Bank continuously for the five years from 2010 to 2015. It was also rated as the Best Bank in the years 2013, 2014 and 2015, due to its robust growth. During the years of 2018 and 2019 it did total business of 616 billion rupees. The bank’s planned outlay for the financial year is to reach business worth 600 billion rupees, add an additional 24 branches, and increase its ATMs to 1150. The bank has won the Lokmat BFSI Best Private Sector Bank 2014-15 award.
The history of Tamilnad Mercantile Bank dates back to 1921.The idea to establish a bank for the Nadar business community was first proposed at the annual meeting of the Nadar Mahajana Sangam held at Thoothukudi in 1920. In 1921 AMM Sinnamani Nadar, then only 27—took the initiative and played a pivotal role in formation of the bank. AMM Sinnamani Nadaralso took the initiative to identify other founding members for TMB. The bank was originally registered on 11 May 1921 as Nadar Bank Limited under the Indian Companies Act, 1913. M.V.Shanmugavel Nadar was elected as the first chairman on 4 November 1921. The bank was opened to the public by T.V.Balagurusamy Nadar on 11 November 1921 in Ana Mavanna Building at South Raja Street, Thoothukudi.In 1937 Nadar Bank opened a branch in Sri Lanka, but by 1939 it had closed it.
By 1947 the bank had only four branches: Thoothukudi, Madurai, Sivakasi and Virudhunagar.The bank opened its first Indian branch outside the state of Tamil Nadu in 1976 at Bengaluru. The first fully computerised branch was opened at WGC Road, Thoothukudi on 9 December 1984. The Bank launched its ATM Card on 11 November 2000
Tamilnad Mercantile Bank was the first private sector bank in India to introduce computerisation for branch-level operations. The bank adopted modernization as early in the year 1983. Today all 509 branches of the bank are networked using Infosys’s “FINACLE” Software and have achieved 100% connectivity.
RTGS/NEFT facilities in ebanking have been successfully implemented. The bank has also entered into an agreement with BillDesk (India ideas.com), CCAvenue (Avenues India), SBI ePay, Atom Technologies and PayU India for providing payment gateway services to the internet banking customers. It was the first old bank to have introduced mobile banking and providing POS machines to their Customers. The bank has implemented a video conferencing facility to connect Head Office with various Departments and Regional offices. TMB is a member of National Financial Switch for its ATM operations.
Tie-up arrangement made with Western Union Money Transfer, UAE Exchange & Financial Services…etc. for remittances from abroad to India to facilitate quick receipt of remittances by the beneficiaries. The bank has tie-up agreement with ICICI Prudential Mutual Fund, UTI Mutual Fund, Reliance Mutual Fund, Franklin Templeton Mutual Fund, Birla Sun Life Mutual Fund, Sundaram Mutual Fund and HDFC Mutual Fund for selling their Mutual Fund Products. The bank became a Depository participant through NSDL to make available Demat facilities. TMB was the first bank in south India to offer ASBA facilities. It also offers off-line and online share-trading through Religare Securities. TMB entered the commodity futures market by becoming a clearing bank for NCDEX and MCX. It was one of the first banks in the banking industry to have online deposit opening through the TMB e-connect facility.
TMB has introduced “Choose Your Account Number” facility for anywhere banking account holders and introduced Missed Call Banking to check Account Balance, BSNL bill payment through branches and RuPay Debit Card. The Mobile application like TMB e-Passbook and TMB Locations are also introduced.
The bank had achieved a turnover of Rs. 15,726 crores in foreign exchange for the year ended March 2019. In terms of forex turnover, TMB ranks first among the Tamil Nadu-based private sector banks. With a view to provide enhanced facilities to the bank’s customers, the bank shifted its foreign exchange department from Tuticorin to Chennai, and created an integrated Treasury and Foreign Exchange Operations Department with adequate infrastructure to handle trading in Government Securities, Bonds, Shares, foreign exchange and derivatives…etc. TMB is a member of the Society for Worldwide Interbank Financial Telecommunication (SWIFT).
TMB has tie-up arrangements with IDBI Bank (136 locations), and HDFC Bank (531 locations)