Tamilnad Mercantile Bank makes stock market debut below issue price

New Delhi: Shares of Tamilnad Mercantile Bank made their exchange debut with a minor discount of nearly 3 per cent against its issue price on Thursday.
The stock got listed at Rs 495 against its issue price of Rs 510 per share. Earlier this month, the initial public offering (IPO) of Tamilnad Mercantile Bank was subscribed 2.86 times at the end of the scheduled three-day window. The portion reserved for the retail investors was subscribed 6.48 times, data showed. On the second day itself, the overall issues on offer were fully subscribed.
The company had set a price band of Rs 500-525 per share for the IPO. On the upper end of the price band, the company was set to raise around Rs 831.60 crore from the public issue.
The Thoothukudi (formerly Tuticorin)-based private lender plans to utilise the money raised through the IPO to augment its tier-I capital base to meet its capital requirements.
Being one of the oldest private sector banks in India, it offers a range of banking and financial services primarily to micro, small and medium enterprises, agricultural and retail customers.
Tamilnad Mercantile Bank's total number of branches stood at 509 as of March 31, 2022. Out of these 106 branches were in rural, 247 in semi-urban, 80 in urban and 76 in metropolitan centres.
For the financial year 2021-22, Tamilnad Mercantile Bank reported a net profit of Rs 821.91 crore as compared to Rs 603.33 crore recorded in the previous year, registering a year-on-year growth of 36 per cent.
The bank's net interest income jumped 18 per cent year-on-year to Rs 1,815.23 crore for the financial year ended in March 2022.
Tamil Nadu Mercantile bank was incorporated as Nadar Bank in 1921 and its name was changed to Tamilnad Mercantile Bank in the year 1962.
"Those who applied for listing gains can maintain a stop loss of Rs. 470 Long-term investors should wait for some quarters to let the dust settle, and in the meanwhile, we suggest investors go for the existing listed banks where the management's track record and performance during multiple credit cycles are visible," said Santosh Meena, Head of Research at Swastika Investmart.
In short, large-sized banks and a few mid-sized banks are the best to ride on the upcoming credit and economic growth cycle," Meena added. (ANI)