Private-sector lender Tamilnad Mercantile Bank has filed preliminary papers with capital markets regulator Sebi to mop-up funds through an initial share-sale.

The initial public offering (IPO) comprises fresh issue of 15,827,495 equity shares and an offer-for-sale of up to 12,505 equity shares by selling shareholders, according to the draft red herring prospectus (DRHP).

The offer-for-sale consists of sale of up to 5,000 equity shares each by D Prem Palanivel and Priya Rajan, up to 1,000 equity shares by Prabhakar Mahadeo Bobde, up to 505 equity shares by Narasimhan Krishnamurthy and up to 500 equity shares each by M Malliga Rani and Subramanian Venkiteshwaran Iyer.

Augmenting tier-1 capital

The Tuticorin-based bank proposes to utilise the net proceeds from the fresh issue towards augmenting its tier–I capital base to meet its future capital requirements.

Tamilnad Mercantile Bank is one of the oldest private sector banks in the country with a history of almost 100 years. It offers a wide range of banking and financial services primarily to micro, small and medium enterprises (MSME), agricultural and retail customers.

As of June 30, 2021, the bank has 509 branches, of which 106 branches are in rural, 247 in semi-urban, 80 in urban and 76 in metropolitan centres.

As of June 30, 2021, it had a customer base of around 4.93 million of which 70 per cent comprised customers who were associated with the bank for more than five years.

Axis Capital, Motilal Oswal Investment Advisors and SBI Capital Markets are the book running lead managers to the public issue.

The equity shares are proposed to be listed on the BSE and the NSE.