- Date : 05/09/2022
- Read: 3 mins
Tamilnad Mercantile Bank IPO opens from 5th to 7th September
Tamilnad Mercantile Bank IPO opens from 5th to 7th September. The price range of the IPO of the share is Rs 500 to Rs 525. It is a 101 year old bank, and the company intends to raise Rs 832 crores. It is one of the oldest private sector banks. The grey market premium of the stock is Rs 35. It implies that the stock can open at a premium, and it will be beneficial to the investors.
The company’s total advances as of 31 March 2022 stood at Rs 34000 crores. The advances have increased 21% YOY. The company is a large regional financial institution. It relies on retail, small and medium enterprises, agricultural loans, etc. The bank offers home loans, auto loans, education loans, personal loans, etc. The RAM portfolio of the bank has increased at a CAGR of 12.94% from FY 20-22. The corporate loan book of the bank is 12.53% of the total book. The share of secured lending is very high for the bank. Total deposits are approximately Rs 45,000 crores. Tamil Nadu has contributed roughly 75% of the total deposits and advances. Thus, it is a regional bank.
Related: All about IPOs in India
Tamilnad Mercantile Bank IPO details
The IPO details are as follows:-
- The issue opens on 5th September and closes on 7th September.
- The price range for the IPO of the share is Rs 500 to Rs 525.
- The company plans to raise up to Rs 832 crores at the upper end of the price band.
- The lot size is 28 shares.
- SBI Capital markets, Axis Capital and Motilal Oswal are the lead book-running managers.
- The fresh issue is 1.58 crore shares.
- The grey market premium is Rs 35 per share, but it is not always reliable.
So, should you apply to the IPO? Read on to know more.
Related: Is your IPO rightly valued?
The IPO of Tamilnad Mercantile Bank looks attractively priced at 1.35x FY22 Book value. The ROA can be sustained at 1.5%. The NIM is close to 4%, and it looks sustainable, as per the experts. As it is an old bank, the asset quality is stable. The operating expenses look reasonable and not very high. The cost of deposits is high, but the NIM is reasonable at 4%. The loan growth performance of the bank is good, and it looks sustainable. The GMP is Rs 35, and reasonable listing gains are expected. The 101 year old legacy of the bank appeals to the investors, and investors can apply for the long term.
Related: What did the IPO's of 2021 teach us?
Tamilnad Mercantile Bank Limited | IPO Review | CA Rachana Ranade
Tamilnad Mercantile Bank IPO opens from 5th to 7th September. The price range of the IPO of the share is Rs 500 to Rs 525. It is a 101 year old bank, and the company intends to raise Rs 832 crores. It is one of the oldest private sector banks. The grey market premium of the stock is Rs 35. It implies that the stock can open at a premium, and it will be beneficial to the investors.
The company’s total advances as of 31 March 2022 stood at Rs 34000 crores. The advances have increased 21% YOY. The company is a large regional financial institution. It relies on retail, small and medium enterprises, agricultural loans, etc. The bank offers home loans, auto loans, education loans, personal loans, etc. The RAM portfolio of the bank has increased at a CAGR of 12.94% from FY 20-22. The corporate loan book of the bank is 12.53% of the total book. The share of secured lending is very high for the bank. Total deposits are approximately Rs 45,000 crores. Tamil Nadu has contributed roughly 75% of the total deposits and advances. Thus, it is a regional bank.
Related: All about IPOs in India
Tamilnad Mercantile Bank IPO details
The IPO details are as follows:-
- The issue opens on 5th September and closes on 7th September.
- The price range for the IPO of the share is Rs 500 to Rs 525.
- The company plans to raise up to Rs 832 crores at the upper end of the price band.
- The lot size is 28 shares.
- SBI Capital markets, Axis Capital and Motilal Oswal are the lead book-running managers.
- The fresh issue is 1.58 crore shares.
- The grey market premium is Rs 35 per share, but it is not always reliable.
So, should you apply to the IPO? Read on to know more.
Related: Is your IPO rightly valued?
The IPO of Tamilnad Mercantile Bank looks attractively priced at 1.35x FY22 Book value. The ROA can be sustained at 1.5%. The NIM is close to 4%, and it looks sustainable, as per the experts. As it is an old bank, the asset quality is stable. The operating expenses look reasonable and not very high. The cost of deposits is high, but the NIM is reasonable at 4%. The loan growth performance of the bank is good, and it looks sustainable. The GMP is Rs 35, and reasonable listing gains are expected. The 101 year old legacy of the bank appeals to the investors, and investors can apply for the long term.
Related: What did the IPO's of 2021 teach us?
