Private sector lender Tamilnad Mercantile Bank (TMB) plans to raise Rs 1,000 to 1,300 crore through its initial public offering (IPO), which is expected to hit the market by November. The bank, among the few still unlisted, will offer to sell shares of existing investors outside of the new share issue.
KV Rama Moorthy, managing director and CEO of Tamilnad Mercantile Bank, told media on Tuesday via virtual mode that work was underway to file the document with the Securities and Exchange Board of India (Sebi).
“We will file the draft prospectus with the market regulator within the next eight to ten weeks. After issuance, the dilution will be approximately 10%. It could be a mix of offer to sell (OFS) and new issue of shares, ”he said. Refusing to divulge the finer details regarding the matter, Moorthy said it was too early to talk about the price of the offering and the relationship between OFS and new issue. The bank would use the product to expand its branch network from 509 to 650 currently.
“In the current fiscal year, it would add 66 branches and the rest in the next fiscal year. Although TMB does not need licenses to open new branches at the moment, it had already identified 28 locations to open branches and carried out picnic work, ”he said.
Regarding strategies for the 2021-22 fiscal year, Moorthy said there will be an increased push towards continued growth for CASA, credit growth with a particular focus on personal loans. The bank will leverage technology for business development and to improve the efficiency of the delivery of all banking services.
The 100-year-old Tuticorin-based old economy bank on Tuesday recorded 48% growth in net profit for the year ended March 31, 2021, to Rs 603 crore, due to multiple factors such as reduced provisioning, increased advances and revised interest rates, among others. For FY21, net interest income (NII) increased to Rs 1,537.53 crore from Rs 1,319.51 crore, with a growth rate of 16.52%. The bank’s interest income stood at Rs 3,609.05 crore with an increase of 4.12% over the previous year’s figure of Rs 3,466.11 crore.
The gross NPA as a percentage of total advances was reduced to 3.44% (3.62%) and the net NPA stood at 1.98% (1.80%). The bank’s NPA and restructured advances were only 3.93%, he said. The provision coverage ratio was 79.53% (80.75%) and the bank made an additional standard asset provision (Covid-II wave) of Rs 50 crore.
The bank’s capital adequacy ratio (Basel III) increased to 18.94% (16.74%). The bank’s deposits increased to Rs 40,970.42 crore (Rs 36,825.03 crore) with a growth rate of 11.27% while the average growth was 9.39%. The CASA position increased to Rs 11,685.27 crore with a growth rate of 22.77% and the average growth was 18.37%. The bank’s advance level increased to Rs 31,541.81 crore with a growth rate of 11.71% and the average growth was 9.98%.