The initial public offering (IPO) of Tuticorin-headquartered Tamilnad Mercantile Bank would open for subscription on Monday. The issue would conclude on September 7. The private sector lender has mobilised over Rs 363 crore from anchor investors.
The Securities Appellate Tribunal (SAT) dismissed the appeals filed by institutional investor shareholders of Tamilnad Mercantile Bank seeking to stall the Rs 832-crore initial share sale on Friday.
IPO price band:
Tamilnad Mercantile Bank has fixed the IPO price band at Rs 500-525 per share for the Rs 832 crore public offer.
The bank would be issuing 1.58 crore new equity shares of Rs 10 face value in the IPO, nearly 10 per cent of its equity shares.
Tamilnad Mercantile Bank doesn’t come under the SEBI norm of 25 per cent minimum public shareholding as it is already completely owned by shareholders.
All of the six foreign shareholders — Robert & Ardis James Company (4.95 per cent), Starship Equity Holdings (4.72 per cent), Subcontinental Equities (4.64 per cent), East River Holdings (3.72 per cent), Swiss Re Investors Mauritius (1.90 per cent) and FI Invest Mauritius (1.48 per cent) — would have to retain their holdings for the next six months after the IPO.
The equity shares are expected to list on September 15.
Grey market premium:
Market participants said the Tamilnad Mercantile Bank IPO grey market premium (GMP) today is at Rs 30. It implies that the grey market is expecting the lender to list around Rs 555 (Rs 525 + Rs 30), which is around 5.71 per cent higher from the IPO’s upper band price of Rs 525 per equity share.
The Tuticorin-based bank proposed to utilise the proceeds from the issue for augmenting its Tier-I capital base to meet future capital requirements.
The lender is one of the oldest private sector banks in the country with a history of almost 100 years. It offers a wide range of banking and financial services primarily to Micro, Small and Medium Enterprises (MSME), agricultural and retail customers.
As of March 2022, the bank has 509 branches, of which, 106 branches are in rural, 247 in semi-urban, 80 in urban and 76 in metropolitan centres. It had a customer base of around 5.08 million as of March 2022. Of which, nearly 80 per cent comprised customers who were associated with the bank for more than five years.
The company said that 75 per cent of the issue has been reserved for qualified institutional investors, 15 per cent for the non-institutional investors and the remaining 10 per cent for retail investors.
Axis Capital Limited, Motilal Oswal Investment Advisors Limited and SBI Capital Markets Limited are the book running lead managers to the public issue.
(With inputs from PTI)