Tamilnad Mercantile Bank shares make tepid debut at exchanges, list at 2.86% discount to issue price

Shares of Tuticorin-headquartered Tamilnad Mercantile Bank made a tepid debut at the exchanges on Thursday. The stock got listed at Rs 510 on the BSE index, a discount of 2.86 per cent against the issue price of Rs 525 (upper band). On NSE, the scrip started trading at Rs 495, down 5.71 per cent from the issue price.

The initial public offering (IPO) of the private lender got subscribed 2.86 times on the last day of subscription (September 7). The Rs 831.6-crore IPO received bids for 2,49,39,292 shares against 87,12,000 shares on offer.

Retail individual investors’ category received 6.48 times subscription, while the quota for non-institutional investors was subscribed 2.94 times. The category for qualified institutional buyers (QIBs) got 1.62 times subscription.

The initial share sale of 1.58 crore equity shares had a price range of Rs 500-525 per share. The bank proposes to utilise the proceeds from the issue for augmenting its Tier I capital base to meet future capital requirements.

It offers a wide range of banking and financial services primarily to micro, small and medium enterprises (MSMEs), agricultural and retail customers. Axis Capital, Motilal Oswal Investment Advisors and SBI Capital Markets were the managers to the offer.

Tamilnad Mercantile Bank is one of the oldest private sector banks, with a history of 101 years. It was established in 1921 as Nadar Bank and assumed the present name in 1962.

It reported a net income of Rs 8,212 crore in fiscal 2022. The bank operates 509 branches, of which 369 are in Tamil Nadu.