Private sector lender Tamilnad Mercantile Bank Limited (TMB) is planning to raise ₹1,000 crore-₹1,300 crore before November to meet branch expansion and other expenditure via an initial public offering (IPO) and offer for sale (OFS).
“We will be filing the necessary papers with the Securities and Exchange Board of India within the next eight to 10 weeks,” said K.V. Rama Moorthy, MD & CEO.
“Overall, the post-issue dilution will be about 10%. It might be a mix of offer for sale (OFS) and fresh issue of shares,” he addd.
TMB will use the proceeds of the issue to expand branch network from the current 509 to 650. During the current fiscal, it would add 66 branches and the rest in the next fiscal. As of now, TMB does not have required licences to open new branches. It had already identified 28 locations to open new branches and done some spade work, he added.
The bank, meanwhile, posted a 48% growth in FY21 net profit to ₹603 crore on account of multiple factors including lower provisioning, increase in advances and revision of interest rates.
Net interest income rose 16.5% to ₹1,537.53 crore. Capital adequacy ratio rose to 18.94% from 16.74%. The board declared a dividend of ₹5 per share.
Provision coverage ratio contracted by 1.51% to 79.53%. TMB has made additional standard asset provision (COVID II wave) of ₹50 crore.
Gross NPA as on March 31 stood at 3.44% against 3.62% in the year-earlier period while net NPAs stood at 1.98% against 1.8%.
During FY22, TMB would lay thrust on consistent CASA growth, credit growth with specific thrust on retail lending and introduce call centre operations, among others, he said.
