Tamilnad Mercantile Bank IPO: The initial share sale of TMB saw an overall subscription of around 39 percent in the first three hours of the bidding process.
Tamilnad Mercantile Bank's initial public offering (IPO), to raise up to Rs 832 crore, was subscribed 83 percent on Monday, the first day of the bidding process. TMB — one of the country's oldest private sector lenders — shares are available for bidding in a price band of Rs 500-525 in multiples of 28 under the IPO, the subscription window for which will close on September 7.
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By the end of the day, the IPO received bids for a total of 72.6 lakh Tamilnad Mercantile shares against the 87.1 lakh shares on offer, according to preliminary exchange data.
|Investor category||Subscription (%)|
|Qualified institutional buyers||73|
One lot of Tamilnad Mercantile Bank shares is worth Rs 14,000-14,700.
On Friday, Tamilnad Mercantile Bank said it had raised Rs 363.5 crore by allocating 71.3 lakh shares to anchor investors at Rs 510 apiece. Its anchor investors include Nomura, Societe Generale, Max Life Insurance, Kotak Mahindra Life Insurance and Bajaj Allianz Life.
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, receiving bids for 32.6 times and 56.7 times the shares on offer respectively. 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.
A number of brokerages recommend subscribing to the Tamilnad Mercantile Bank IPO.
Yes Securities has assigned a 'subscribe' rating on the IPO, citing the lender's asset quality outcomes, which have reached a stage that can be regarded as stable and benign. It is also positive on TMB's reasonable loan growth performance as well as operating expense control outcomes.
Investmentz also suggests subscribing to the issue for the long term.
"TMB can be a good investment avenue owing to its better growth with healthy asset quality, robust risk management system, equipped with basic retail banking infrastructure, and sizeable market to grow. However, pending legal matters may impact TMB if the verdict goes against the bank," the brokerage said.
(Edited by : Sandeep Singh)
First Published: IST