TMB Bank (Tamilnad Merchantile Bank) is a private sector bank that has existed since the pre-independence era. From its humble roots, the bank has grown to have an extensive network today but its primary concentration is still in Tamil Nadu. The bank has the honour of receiving the award of being the fastest growing private sector bank for 5 consecutive years and also the best private sector bank.
The bank is now coming out with an IPO which was long due but was restricted based on the RBI policy and direction for listing. Post the listing the bank is set for its planned expansion. Below are the details of the TMB IPO and whether it is a good investment opportunity for investors.
The objectives of this IPO and its target expectations from this IPO are mentioned below.
The key details of the IPO are tabled below.
Category | Details |
IPO Opening Date | 5th September 2022 |
IPO Closing Date | 7th September 2022 |
Listing | NSE, BSE |
Issue Type | Book Building Type |
Fave Value of shares | Rs.10 per share |
IPO Price Band | Rs.500 – Rs.525 |
IPO Issue size | 1,58,40,000 shares of Rs.10 each |
Fresh Issue size | 1,58,40,000 shares of Rs.10 each |
IPO Size | Rs.831,60,00,000 |
Offer For Sale |
The IPO will be open for a brief period and the other important dates pertaining to the IPO are as below.
Event | Date |
Opening date | 5th September 2022 |
Closing Date | 7th September 2022 |
Allotment date | 12th September 2022 |
Refund Date | 13th September 2022 |
Share Credit Date | 14th September 2022 |
Listing Date | 15th September 2022 |
The lot size of the TMB IPO is clearly defined. Investors will have to invest in specific lot sizes and therefore, investment in individual shares or fraction of lots will not be available. The details of the lot sizes and the minimum amount of investment is tabled below.
Category | Details |
Minimum investment | 1 lot |
Shares in each lot | 28 shares |
Minimum amount of investment per lot | Rs. 14,700 |
Maximum permissible investment in Lots | 13 lots |
Maximum shares for investment | 364 shares |
Maximum amount of investment permissible | Rs. 1,91,100 |
The TMB IPO will be available for subscription for three categories of investors. The maximum permissible investment for each category is tabled below.
Category of Investor | Reservation of the IPO applicable | Maximum shares for subscription | Amount of investment |
QIB (Qualified Institutional Buyers) | 75% | 1,18,80,000 | Rs. 623,70,00,000 |
NII (Non-Institutional Bidders) | 15% | 23,76,000 | Rs. 124,74,00,000 |
RII (Retail Individual Investors) | 10% | 15,84,000 | Rs. 83,16,000 |
Tamilnad Merchantile Bank has shown a steady increase in its revenue band profits and fundamentally is a good bet for the investors. The key financial data of the bank over the last three years to highlight its progress is tabled below.
Category | 2020 | 2021 | 2022 |
EPS | 28.61 | 42.34 | 57.67 |
PAT (Rs. in crores) | 464.89 | 654.04 | 901.90 |
Interest Earned (Rs. in crores) | 3466.11 | 3609.05 | 3833.86 |
EBITDA (Rs. in crores) | 1030.10 | 1251.62 | 1566.74 |
Revenue (Rs. in crores) | 3992.53 | 4253.40 | 4656.44 |
A few more details of TMB’s financials and comparable data with peers are highlighted below which show the relative position of TMB in the industry.
These parameters further showcase the relatively better position of TMB and its fast track for growth.
The key risk of investment in this IPO is mentioned hereunder.
The overall performance of TMB has been quite impressive in the past years especially in terms of its core financials, like the increase in deposits by 10.46% CAGR, increase in interests income by 17% CAGR, and decrease in gross NPA from 3.62% to 1.69%.
The ROA (Return on Assets ratio)for the bank is also higher at 1.66% compared to the average of 0.80% of its peers. Reviewing these hard data and given its more than 100-year-old existence, it can be safely said that TMB Bank has established itself as a trustworthy name among the masses.
Also, the TMB IPO is priced at approximately 1.4 times higher than its book value in FY 22 (based on fully diluted post-issue equity). All these factors make it an overall attractive investment option for investors looking for long-term investments. However, investors looking for listing gains may be disappointed as the grey market premium was approximately 10% which had eventually come down to Rs. 7 by end of the trading day on 5th September 2022.
Investors can invest in this IPO through the Fisdom app.
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