The Tamilnad Mercantile Bank Ltd has filed a draft red herring prospectus (DRHP) with the Securities Exchange Board of India (SEBI) to raise funds via an initial public offering (IPO). The IPO comprises a fresh issue of equity shares worth up to 15.83 million shares and an offer for sale (OFS) of up to 12,505 shares by its existing promoters and shareholders.

Axis Capital, Motilal Oswal Investment Advisors, and SBI Capital Markets lead the issue.
Proceeds from the issue will be used for augmenting the lender’s tier I capital base. As of March 2021, the lender was required to maintain a minimum CRAR of 10.87 per cent based on total capital to risk-weighted assets. Its tier I capital adequacy ratio was at 17.93 per cent, and level I capital was at Rs 44.86 billion.

For fiscal 2021, the bank’s gross non-performing assets (NPAs) were at 3.44 per cent against 3.62 per cent a year ago. Net NPA stood at 1.98 per cent versus 1.8 per cent last year. Its CASA ratio improved to 28.52 per cent from 25.85 per cent.

Total deposits stood at Rs 409.70 billion, up from Rs 368.25 billion last year, while incremental advances were at Rs 310.70 billion against Rs 277.16 billion. Net interest income for the year stood at Rs 143.75 billion versus Rs 131.95 billion. Net profit was at Rs 6.54 billion against Rs 4.65 billion.

It had 4.18 million customers in Tamil Nadu, comprising 85.07 per cent of its total customer base. It has a presence in Gujarat, Maharashtra, Karnataka and Andhra Pradesh.