Tamilnad Mercantile Bank made a tepid debut on Dalal Street on Thursday, in contrast to the trend seen in the grey market in the past few days. The Tamilnad Mercantile Bank (TMB) stock began trading on BSE at Rs 510, as against its IPO price range of Rs 500-525. On NSE, Tamilnad Mercantile shares started their journey at Rs 495.
TMB shares settled at Rs 508.5 apiece on BSE and Rs 510 on NSE on the listing day.
The lender had commanded a premium to the tune of Rs 5-35 in the grey market — or an unofficial market for unlisted securities — in the past few days, dealers said.
The IPO of TMB — one of the country's oldest private sector banks — worth Rs 832 crore concluded last week with an overall subscription of almost three times with modest demand across investor categories.
Those with a long-term view wait for the stock to gain as the Nifty Bank looks bullish, said Manoj Dalmia, Founder and Director, Proficient Equities. "Even those looking for gains can hold for a few weeks but with a stop loss as per their risk appetite," he said.
Tamilnad Mercantile Bank's IPO — which was open for subscription from September 5 to September 7 — attracted bids for a total of 2.5 crore shares against the 87.1 lakh shares on offer, marking an overall subscription of 2.9 times, according to exchange data.
Shares under the IPO were available for bidding in a price band of Rs 500-525 in multiples of 28. That made one lot of Tamilnad Mercantile Bank shares worth Rs 14,000-14,700 for bidding.
Ahead of the IPO, Tamilnad Mercantile Bank raised Rs 363.5 crore from anchor investors including Nomura, Societe Generale, Max Life Insurance, Kotak Mahindra Life Insurance and Bajaj Allianz Life, by allocating 71.3 lakh shares at Rs 510 apiece.
Tamilnad Mercantile Bank's is the third initial share sale to hit Dalal Street within a span of three weeks, following a lull of almost three months.
Last month, the IPOs of Syrma SGS Technology and DreamFolks Services concluded with a strong response from investors. Syrma shares made a strong debut in the secondary market, finishing the listing day at a premium of about 42 percent over the issue price.