15 Days Price Change
Market Cap ₹ 8551Cr.
Current Price ₹ 600
Lot Size
52W High ₹
EPS 57.67
P/B 1.6
Face Value 10
Debt to Equity 0
Stock P/E 10.4
Book Value ₹ 374.4
Company
52W Low ₹
Demat Account Both
ISIN INE668A01016
Valuation
No. of Shares 14.25Cr.
Company Overview:
Tamilnad Mercantile Bank Limited (TMB) is a bank headquartered at Thoothukudi, Tamil Nadu, India. TMB was founded in 1921 as the Nadar Bank, but changed its name to Tamilnad Mercantile Bank in November 1962 to widen its appeal beyond the Nadar community. The bank currently has more than 500 full branches throughout India, more than 10 Regional offices and Extension Counters, central processing centres, Service Branch, Currency Chests, e-Lobby centres and Automated Teller Machines (ATM).The bank has been expanding its footprint all over India. Tamilnad Mercantile Bank Ltd., is having the record as the first private sector bank in India to introduce massive computerization for branch level operations. The bank adopted modernization, as early in the year 1983. Today all more than 500 branches are computerized which include small rural branches too. New branches are being opened with full mechanization. The bank is embarking on a scheme of Total Branch Automation in technological partnership with M/s. Infosys Technologies Ltd., Bangalore, India’s leading software company and a global technology leader. With the above partnership, the earlier decentralized branch automation system got replaced with “FINACLE” the core e-banking platform from M/s. Infosys Technologies Ltd., integrating the operations of all the branches. The bank is the pioneer in introducing issuance of computerized drafts to its customers. Computerization has enabled the bank to render much better and satisfied service to its customers.
Vision:
To be a progressive bank with strong brand equity, enhancing value for all the stake holders through excellence in performance and good governance.
Business Segments:
Competitive Strength:
With almost 100 years of history, TMB have established itself as a well-recognized scheduled commercial bank having a strong network of branches, ATMs and CRMs across several states of South India including Tamil Nadu being their home state, along with Maharashtra, Gujarat, Karnataka, and Andhra Pradesh, which has enabled us to maintain a strong customer base. As of March 31, 2019, 2020 and 2021, we had 4.42 million, 4.65 million and 4.91 million customers respectively with a CAGR of 5.38% from March 31, 2019 to March 31, 2021. Further, large portions of their existing customers have been associated with them for more than five years specifically in the states of Tamil Nadu, Andhra Pradesh, Maharashtra, Karnataka and Gujarat contributing 70.94%, 66.09%, 58.43%, 52.44% and 41.19% of their total customer base in each of these states respectively as of March 31, 2021, and 60.35%, 2.41%, 1.58%, 1.05% and 0.75% of their overall customer base as of March 31, 2021, across the 16 states and 4 UT's where they are present. TMB have consistently worked towards developing long-term relationships with customers based on our knowledge of local needs and experience in the sector, amongst other things. TMBs largest branch is located in Mandvi, Mumbai, contributing ₹ 16,683.90 million or 2.30% to their Total Business as of March 31, 2021. One of the oldest branches is in Sivakasi, Tamil Nadu, which was started in 1942 and contributes ₹ 12,806.30 million or 1.77% to our Total Business as of March 31, 2021. With a focus on increasing existing customer base, TMB have introduced various alternate banking channels such as ATMs, CRMs, internet banking, mobile banking, E-Lobbies, point of sales (“PoS”), banking and debit and credit cards. They introduced internet banking to their customers in 2008 through ‘TMB-Econnect’ and utility payment facility which enabled customers to pay bills for cable operators/DTH operators, electricity services, mobile phone utility services, other utilities and tax services. We have approximately 0.23 million customers using internet banking facilities and approximately 0.68 million customers are using mobile banking facilities, as of June 30, 2021. Their E-Lobbies are mini-branches which have been introduced with an aim to reduce human interface and cater to basic banking facilities of our customers. The E-Lobbies include facilities such as cheque deposits, cash withdrawal, passbook printing that are available 24*7 to customers to access at their convenience. As of June 30, 2022, TMB have more than 47 E-Lobbies, 1,131 ATMs and 262 CRMs and 3,975 PoS terminals across India. During Fiscal 2019, 2020, and 2021, alternate banking channels have contributed ₹ 757.89 million, ₹ 847.12 million, and ₹ 842.42 million respectively to our total income with a CAGR of 5.43% from March 31, 2019 to March 31, 2021.
Key Growth Strategy Of TMB:
TMBs growth in the past few years has been driven by strong understanding of the needs and expectations of our RAM customers. Their RAM Portfolio has increased from ₹ 206,951.77 million in Fiscal 2019 to ₹ 274,673.88 million in Fiscal 2021 at a CAGR of 15.21%. They have higher growth potentials in geographies where they exist such as in the State of Tamil Nadu and Gujarat which have lower bank credit to GDP ratios that are indicative of opportunities for banks and with presence in the rural and semi-urban markets, they are well positioned to continue attracting higher proportion of RAM customers. Their long terms growth strategy is aligned to the RBI guidelines of Priority Sector Lending (“PSL”) which encourages inclusive lending policies, targeted at retail customers from weaker sections, agriculture and MSME customers who are covered under priority sector. Therefore, TMBs focus is on boosting the RAM loan book through SME loan, house loans, car loan, personal loan, Loan Against Property (“LAP”) and pensioner’s loans, jewel loan, agricultural loan and good quality mid-corporate segment loans on particular basis.
Bank will continuously focus on exploring and introducing new and customized fee-based products in connection with our centenary anniversary and strategies like TMB win-back campaign in addition to our existing products such as ‘TMB Home Loan’, ‘TMB Affordable Home Loan’, ‘TMB Mahalir’, and ‘TMB Tractor’. Bank will also focus on improving experience of already available products as well as more tie ups with strategically identified third parties and leveraging our deep market expertise and relationships to leverage cross-selling opportunity, to grow deposits, improve advances sector wise and grow our fee-based income.
TMB also aim to expand the branch-wise targets by opening new Retail Assets Central Processing Centres (“RACPCs”) with dedicated home loan sales teams posted at these locations to drive further home loan portfolio growth. As of June 30, 2021, Bank has one RACPC located at Chennai, Tamil Nadu, to which 36 branches of our Bank are linked. The housing loan portfolio of these 36 branches grew from 1,343 accounts with an outstanding amount of ₹ 2,457.85 million as on March 31, 2019 to 1,618 accounts with an outstanding amount of ₹ 3,467.79 million as on June 20, 2021. TMB is also focussed on diversifying their product portfolio so as to gain more customers and increase market share. Bank will continue to expand relationship banking facilities to increase network. TMB intend to focus more on fee based products such as issuing debit cards, credit cards, general insurance, life insurance, online bill payment services, depository services, government schemes, e-stamping and bill payments to existing as well as new customers. We have introduced individual targets to increase income arising through cards, locker system, PoS machine and any third party products. We are also promoting investments in sovereign gold bonds floated by the RBI. We are also aiming to mobilise opening new accounts under the Atal Pension Yojana and National Pension Schemes. We aim to identify potential clients in the import/export industry to augment our bill collection and forex transaction turnover. We also focus on maximizing our revenue through our treasury operations to increase our profit on exchange, profit on sale of investments and income on investments.
TMBs income from fee based products has increased from ₹ 1,487.07 million in Fiscal 2019 to ₹ 1,700.00 million in Fiscal 2021 at a CAGR of 6.92%. With an endeavour to boost revenue from fee based products, bank continue to tie up with various financial and other institutions such as United India Insurance, Life Insurance Corporation, UTI Mutual Fund, Reliance Mutual Fund, Religare Securities Limited, and Stock Holding Corporation of India Limited. TMB also plan to focus on and develop this revenue stream further by scaling up our promotion of the insurance and mutual fund products in our Bank’s digital platforms apart from dedicated business campaigns. They have also entered into an agreement with HDFC Bank Limited and IDBI Bank Limited in relation to acceptance of instruments, like cheques and demand drafts at locations where our Bank does not have its branches.
Promoters and ShareHolding Pattern:
Peer Comparison:
Financials:
Valuations:
TMB posted 48% growth in its net profit for the fiscal ended March 31, 2021, to Rs 603 crore, owing to multiple factors such as lesser provisioning, increase in advances and revision of interest rates, among others. For FY21, the net interest income (NII) has increased to Rs 1,537.53 crore as against Rs 1,319.51 crore, with a growth rate of 16.52%. The interest income of the bank stood at Rs 3,609.05 crore with a 4.12% increase from previous year’s figure of Rs 3,466.11 crore.
The gross NPA as a percentage to total advances reduced to 3.44% (3.62%) and net NPA stood at 1.98% (1.80%). The NPA and restructured advances of the bank was only at 3.93%, he said. Provision coverage ratio was at 79.53% (80.75%) and the bank has made additional standard asset provision (Covid- II wave) of Rs 50 crore. The capital adequacy ratio (Basel III) of the bank 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% whereas the average growth was 9.39%. The CASA position has increased to Rs 11,685.27 crore with a growth rate of 22.77% and the average growth was at 18.37%. The advance level of the bank has increased to Rs 31,541.81 crore with a growth rate of 11.71% and the average growth was at 9.98%.
News:
Tamilnad Mercantile Bank, one of the oldest private sector banks in the country, has received the nod and final observations from the Securities and Exchange Board of India (SEBI) for its proposed initial public offering (IPO).
https://www.thehindu.com/news/national/tamil-nadu/century-old-tmb-gets-sebi-nod-to-float-ipo/article65501061.ece
Tamilnad Mercantile Bank Q4 Results: Profit rises 36% to Rs 822 crore.
https://economictimes.indiatimes.com/markets/stocks/earnings/tamilnad-mercantile-bank-posts-36-23-growth-in-net-profit-to-touch-rs-821-91-crore-in-fy2/articleshow/91667995.cms?from=mdr
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The taxation on the Tamilnad Mercantile Bank Limited shares may vary depending on 2 Factors:
Short-term capital
Unlisted shares - In unlisted shares, the taxation of short-term capital gain i.e. less than 24 months is taxable according to the investor's income tax slab.
Listed Shares - In listed shares, the taxation for short-term capital gains i.e. less than 12 months is at 15%
Long-term capital
Unlisted shares - The taxation for long-term capital gain i.e. more than 24 months is taxable at 20% with indexation benefits.
Listed Shares - The taxation for long-term capital gains i.e. more than 12 months is at 10% after an exemption of 1 lakh. There are no indexation benefits in listed shares.
According to the current rule issued by SEBI last year in August 2021, the lock-in period is brought down from 1 year to 6 months. This was done to entice more investors to invest their money in pre-IPO companies and startups. The lock-in period of Tamilnad Mercantile Bank Limited varies depending on which type of investor you are:
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