TamilNad Mercantile Bank IPO: Latest GMP, how to check allotment status

TamilNad Mercantile Bank IPO GMP

In the grey market, TamilNad MercantileBank IPO has a GMP of ₹5 per equity share on Sunday. A grey market is where a company’s shares are offered unofficially to traders.

With a GMP of ₹5 per share, TamilNad Mercantile Bank is expected to list at a premium of ₹530 per share (upper price band of ₹525 apiece plus ₹5 per share GMP).

TamilNad Mercantile Bank IPO allotment issue

Under its red herring prospectus, TamilNad Mercantile Bank stated that the allotment of equity shares in this offer and the credit of such equity shares to the applicant’s Demat account with the depository participant and trading in the equity shares upon receipt of final listing and trading approvals from the Stock Exchanges are expected to take six working days of the bid closing date.

The IPO was launched from September 5 to September 7. Thereby, the finalization of allotment of equity shares in the IPO is most likely to be on September 12 and is expected to be credited to the Demat account of bidders on September 14.

The allotment of equity shares can be checked on the registrar’s website which is Link Intime India or on the BSE website.

TamilNad Mercantile Bank IPO

The IPO was entirely a fresh issue with 15,840,000 equity shares (including the anchor portion) offered for subscription. It has a price band of ₹500 per equity share as the lower price band and ₹525 per equity share as the upper price band.

On the last day of the issue, the IPO was fully subscribed by 2.86 times. The portion received for retail individual investors (RII) was oversubscribed by 6.48 times, while the portion for non-institutional investors (NII) fully subscribed by 2.94 times. The reserved portion for qualified institutional buyers (QIB) subscribed by 1.62 times.

TamilNad Mercantile Bank

With over 100 years of experience, Tamilnad Mercantile Bank is one of the oldest and leading old private sector banks in India. The bank’s services focus on a wide range of banking and financial services primarily to micro, small and medium enterprises, agricultural and retail customers.

The bank has about 509 branches, of which 106 branches are in rural, 247 in semi-urban, 80 in urban, and 76 in metropolitan centres. Overall, the bank’s customer base is approximately ~5.08 million as of FY22 and 4.05 million or 79.8% of its customers have been associated with the bank for a period of more than five years.

In its IPO note, Nirmal Bang said “TMB has demonstrated a strong track record of successfully growing and managing a granular portfolio with superior asset quality metrics. TMB stands out among the old generation private banking peers on most metrics. We believe TMB can sustain ROA at around 1.5% levels in coming years on the back of stable NIM at around ~4.0% levels and a decline in credit cost to below 1%. TMB is being offered at 1.35x FY22 BV which is at a slight discount to peer banks having similar return ratio profile.”

Ventura Securities analysts highlighted a bull and bear case scenario for Tamilnad Mercantile Bank. In the bull case, the analysts note said, “We have assumed FY25 Gross Advances of INR 52,106.9 cr in FY25 (CAGR of 15.3% over FY22-25) and NIM margins of ~4.2% (+40bps over FY22). We assign an FY25 target PB of 1.7x.” However, in the bear case, the note said, “We have assumed FY25 Gross Advances of INR 44,388.2 cr in FY25 (CAGR of 9.3%) and NIM margins of ~3.4% (-42bps over FY22). We assign an FY25 target PB of 0.8x.”

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