TMB Bank makes a tepid debut

Tamilnad Merchantile Bank (TMB Bank) made a tepid debut on the bourses today. As against the IPO price of Rs.525, it got listed on the BSE at Rs.510, going down briefly to its 20% LC of the day at Rs.484.50. It has recouped and is currently trading at Rs.512, nevertheless as a discount to the IPO price.

The IPO was subscribed 2.8 times with retail investors taking the giant portion at 6.48 times, followed by HNIs at 2.94 times; response from QIBs was not gung-ho at 1.62 times.

This is a 101-year old bank from Tamil Nadu, with nearly 75% of 509 branches in the home state. 3/4th branches are also spread in semi-urban and rural (SURU) areas. Unlike Kerala based banks like Federal and CSB Bank, TMB is not dependent on NRI inflows for deposits.

Our conclusion in the IPO Analysis, “Sizeable presence in a fast-growing industrial state of Tamil Nadu combined with positive outlook on the banking sector (due to rising interest rate and lower expected provisions) makes the IPO attractively priced at the upper band. Hence, the IPO is a subscribe.”

Our Editor, Mr.SP Tulsian opines that it’s a good buy at the current rate and has given a ‘buy’ to those interested in accumulating the stock.