Shares of private sector lender Tamilnad Mercantile Bank (TMB) ended flat on Thursday after a muted debut on the stock exchanges. The share was listed at the IPO price of Rs 510 on the BSE, but at Rs 495 on the NSE at a discount of 3% against the issue price.
After opening flat on th BSE, the shares dropped to Rs 484.50 on the lower side and marginally rose to a high of Rs 519 during the day, before closing at Rs 508.45. On the NSE, the stock went up to a high of Rs 510, touched a low of Rs 486 and settled with a 0.07% loss at Rs 509.65. Overall, the century-old lender closed the first trading session with a moderate loss.
TMB’s IPO between September 9 and 12 was subscribed 2.86 times on the last day of subscription. The bank mopped up Rs 808 crore from the IPO, which had a price range of Rs 500- Rs 525. The issue proceeds will be utilised to augment the tier-I capital base.
The IPO’s qualified institutional buyers’ category was subscribed 1.62 times while the non-institutional investors’ category was subscribed 2.94 times. The retail individual investors’ category was subscribed 6.48 times.
Speaking at a virtual media round-table on Thursday, Krishnan Sankarasubramaniam, MD and CEO of the bank, said; “ my preliminary view is that it (the listing) is good given the market condition of the day. Basically, it all depends on the demand and supply, I expect a further pick-up in the days to come.”
He said the bank will soon come up with a comprehensive plan for network expansion, which had been held back by the Reserve Bank of India. “We are in the process of board-level deliberations on the same. We will be focusing on the digital front more and will adopt a phygital business model, so that we can use the manpower for better purpose such as marketing and recovery,” he said.
On the advances front, Sankarasubramaniam said the bank will continue to focus on the RAM (retail, agri and MSME) segment. “In the case of corporate lending, we will be very selective as was the case earlier too,” he said.
TMB has a network of 509 branches, 369 of which are in Tamil Nadu. The state contributes to about 70% of the bank’s business. The RAM segment contributes to 88.14% of the lender’s loan asset size.
TMB’s gross non-performing assets in 2021-22 stood at 1.69% as against 3.44% in 2020-21, while net NPA was at 0.95% compared to 1.98% in 2020-21.
Sankarasubramaniam said the bank will also work to enhance underwriting standards, monitoring mechanisms and on ways to gear up the recovery models so that it can improve asset quality. The bank will continue with the legacy of being a traders’ bank post the listing on the bourses, he said.