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Tamilnad Mercantile Bank Unlisted Share

₹600 0 | 0%

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.

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Tamilnad Mercantile Bank Unlisted Share Price

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Price

Overview Inc. Year: 1921Industry: Bank - Private

Tamilnad Mercantile Bank (TMB) offers banking products and services in India. The company was incorporated on 11th May 1921 and provides its customers with personal, corporate, and NRI banking products and services. In India, it was the first ever private sector bank to pioneer computerized operation at the branch level, all of its bank branches use FINACLE software from Infosys to get full connectivity. TMB has a total of 509 branches, 12 regional offices, 6 central processing centers, a service branch, and 1151 ATMs all over India to serve a customer base of 4.93 million people. TMB provides personal banking products and services such as savings accounts, fixed and recurring deposits, personal and home loans, vehicle loans, education loans, gold overdrafts, loans against sovereign gold bonds, debit and credit cards, services like Demat account, internet and mobile banking, equity trading account, PoS terminals, online bill payment, e-tax payment, mutual fund, insurance services and a lot more. The company also offers corporate banking products and services, such as current and super flexi current accounts, loans on commercial vehicles, traders and services, vehicle finance for educational institutions, secured overdraft, Forex services, and various services like treasury, e-stamping, and bancassurance. NRI banking products and services, include NRI saving, recurring deposits, term deposit accounts, NRI loans, money transfer services, cards, and online banking services.

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Net Sales (in cr.)

Total Income (in cr.)

Operating Profit (in cr.)

Net Profit (in cr.)

Shareholder Funds (in cr.)

Total Assets (in cr.)

Financial Data (in cr.)

FY18 FY19 FY20 FY21 FY22 YOY % FY22 CAGR % FY22
Net Sales 3250.5 3224.5 3466.1 3609.1 3833.9 6.2 4.2
Total Income 3756.6 3638.8 3992.5 4253.4 4656.4 9.5 5.5
Net Profit 221.9 258.6 407.7 603.3 821.9 36.2 38.7
Shareholder Funds 3404.8 3618.3 3979.6 4580 5335.7 16.5 11.9
Total Assets 37920 40532.8 42758.8 47527.2 52858.5 11.2 8.7
EPS 15.57 18.14 28.61 42.34 57.67 36.2

Financial Docs

Type Period/Date Document
Annual Report 2022-03
Annual Report 2021-03
Annual Report 2020-03
Annual Report 2019-03
Annual Report 2018-03
DRHP 2021-09-04

Tamilnad Mercantile Bank Investment Thesis

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:

  1. Lending to Retail customers:
    Bank primarily offer home loans, personal loans, auto loans, educational loans as well as security backed loans of various types to our retail customers. During the Fiscals 2019, 2020 and 2021, retail customers contributed 16.78%, 19.27%, and 20.60% respectively to our total advances with a CAGR of 19.68% from March 31, 2019 to March 31, 2021.
  2. Lending to agricultural customers:
    Bank primarily offer loan products to individual farmers, group of farmers and agricultural corporates. During the Fiscals 2019, 2020 and 2021, agricultural customers contributed 22.49%, 24.77%, and 27.41% respectively to our total advances with a CAGR of 19.27% from March 31, 2019 to March 31, 2021.
  3. Lending to MSMEs:
    Bank primarily offer various loan products to our MSME customers operating in manufacturing, trading and services sector. During the Fiscals 2019, 2020 and 2021, MSMEs contributed 37.32%, 37.92%, and 39.08% respectively to our total advances with a CAGR of 10.56% from March 31, 2019 to March 31, 2021.
  4. Lending to Corporate Customers:
    Bank offer various kinds of loans to corporates, in textiles and other industries, with our assortment of banking products and services including working capital, term financial, trade financial, structured finance services, foreign exchange business funding in domestic and foreign currencies. During the Fiscals 2019, 2020 and 2021, corporate customers contributed 23.40%, 18.04%, and 12.92% respectively to our total advances with a CAGR of (19.74%) from March 31, 2019 to March 31, 2021.
  5. Loan Against Property (“LAP”):
    Bank offer financial support against properties that cater towards providing finance to traders, professionals, service enterprises, individuals, HUFs various activities including medical treatment, foreign travels, family settlement. These loans are typically sanctioned for customers with a regular banking relationship and the credit ranges from ₹ 0.1 million to ₹ 50.00 million subject to various conditions. Our Bank’s LAP portfolio increased at a CAGR of 15.81% from ₹ 3,275.86 million in Fiscal 2019 to ₹ 4,393.84 million in Fiscal 2021.
  6. Vehicle Loans
    We offer a variety of secured loans under our vehicle loan portfolio for personal and commercial purposes. These loans are usually secured by way of hypothecation of the vehicle for which the loan is advanced. Our Bank’s vehicle loan portfolio increased at a CAGR of 6.12% from ₹ 3,641.87 million in Fiscal 2019 to ₹ 4,101.18 million in Fiscal 2021.
  7. Home Loans
    Bank offer long-term housing loans ‘TMB Home Loans’ catering to various housing requirements of individuals ranging from purchase, construction and renovations. It offer TMB Home Loans to Hindu Undivided Families (“HUFs”) and individuals between the ages of 18 to 50 years and joint loans where one of the customers is below the age of 50 years. The loan amount under the TMB Home Loans ranges from ₹ 30.00 million in non- metro regions to ₹ 50.00 million in metro regions. It also offer customised loans for renovations up to a maximum limit of ₹ 2.50 million. Where IT returns of the borrower are not available, the loan disbursed does not exceed 10 times of the average monthly balance maintained during the last 2 years in the savings bank/current account or ₹ 1.0 million, whichever is lower.

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:

  1. 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

  1. 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

Tamilnad Mercantile Bank Unlisted Shares: FAQs

1. Is trading in Tamilnad Mercantile Bank Limited's unlisted shares legal in India?

Yes trading in unlisted shares is undoubtedly legal in India. The trading takes place in the over-the-counter market through various platforms like Sharescart.com.

2. Is unlisted shares regulated by SEBI?

No, SEBI does not regulate the unlisted share market but certain rules and regulations of SEBI are applicable in the unlisted market space as well, such as, the DP charges for each transaction, stamp duty, lock-in period and more.

3. Where can I get the best Tamilnad Mercantile Bank Limited unlisted share price?

You will get the best price for Tamilnad Mercantile Bank Limited and a hassle-free buying experience only on Sharescart.com platform.

4. How can I buy Tamilnad Mercantile Bank Limited's unlisted shares?

Tamilnad Mercantile Bank Limited's unlisted shares can be easily purchased at Sharescart.com by following a few easy steps. Given below are the steps involved in the buying of these shares:

Step 1 - Confirmation on the number of shares you want to purchase of Tamilnad Mercantile Bank Limited at a trading price.

Step 2 - Submission of the necessary document like your Client Master Report. Certain additional documents will also be asked for by our representative if required such as a cancelled cheque and your PAN Card if you are paying from a secondary bank account which is not mentioned in your CMR.

Step 3 - The Sharescart.com representative will share the account details so that you can transfer the trade amount into the account.

Step 4 - The shares of Tamilnad Mercantile Bank Limited will reflect in your Demat account within 24 hours as soon as the payment is received and depending on the holidays. Our details would be available to you before the transfer.

5. How can I sell Tamilnad Mercantile Bank Limited unlisted shares?

Tamilnad Mercantile Bank Limited's unlisted shares can be easily sold at Sharescart.com by following a few easy steps. Given below are the steps involved in the of selling of these shares:

Step 1- Confirmation on the number of shares you want to sell of Tamilnad Mercantile Bank Limited and at what price you want to sell.

Step 2- At Sharescart, we will find a suitable buyer for you according to your requirements and if you accept the trade we will move on to the transfer and the payment aspect of the trade.

Step 3- The Sharescart representative will provide you with the Demat account details to transfer your Tamilnad Mercantile Bank Limited shares. They will also notify you about the additional details required from your end before the transfer of shares such as client master copy, delivery instruction slip, and more.

Step 4- Once the transfer is complete, the payment would be credited to your bank account within 24 hours, depending on the holidays.

6. What is the minimum ticket size for investment in Tamilnad Mercantile Bank Limited unlisted shares?

Over the years the minimum ticket size for investment has dropped as more and more people have started investing in the Unlisted market. Currently, the minimum ticket size for Tamilnad Mercantile Bank Limited is between 30K to 50K.

7. How to check if Tamilnad Mercantile Bank Limited shares are credited to my account?

Brokers or dealers provide you with a trading facility means you can buy and sell shares with your broker but when you buy shares the Depository holds your shares. There are mainly two depositories NSDL and CDSL.

If you want to check your shares in NSDL and CDSL you need to download the application (NSDL Speede App or CDSL myeasi).

  • You need to download the Application.
  • Login or Register yourself.
  • Fill in your DP Id and Client Id (NSDL DP Id starts with IN and CDSL DP & Client Id in numeric).
  • After registration, log on to your account and go to Dashboard.
  • You can see all your holding (Listed, Unlisted, Mutual Fund) there.

8. What will be the tax bearing on Tamilnad Mercantile Bank Limited?

The taxation on the Tamilnad Mercantile Bank Limited shares may vary depending on 2 Factors:

  • Short-term capital or long-term capital.
  • Pre-IPO stage (unlisted shares) or Post-IPO stage (listed shares)

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.

9. What is the lock-in period of Tamilnad Mercantile Bank Limited 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:

  • Foreign Venture Capital Investor - These investors have a lock-in period of 6 months from the procurement date of Tamilnad Mercantile Bank Limited shares.
  • Alternative Investment Funds II - These investors don't have to serve any lock-in period.
  • Other investors - These investors include body corporate, retail, high net-worth individuals. The lock-in period for them is 6 months from the date of listing of Tamilnad Mercantile Bank Limited enlisted shares.

10. How to check Tamilnad Mercantile Bank Limited unlisted share price daily?

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