The history of Tamilnad Mercantile Bank Ltd., the then Nadar Bank Ltd., dates back to 1921. The thought of establishing a bank under the guidance of the able Nadar business community was mooted out in the Anniversary of Nadar Mahajana Sangam held at Tuticorin in 1920. The proposal was effected soon. tmilnad Mercantile Bank was registered on May 11, 1921 as “The Nadar Bank Ltd.
Tamilnad Mercantile Bank was having only 4 branches until the year 1947 at Tuticorin, Madurai, Sivakasi, and Virudhunagar. Tamilnad Mercantile Bank had also a branch at Colombo in the year 1937 and the same was closed in the year 1939.
Since the incorporation of Tamilnad Mercantile bank, having head quartered at Thoothukudi, Tamil Nadu, India, they have built a strong presence in the state of Tamil Nadu, with 369 branches and 941 automated teller
machines (“ATMs”) and 238 cash recycler machines (“CRMs”) as of June 30, 2021.
As of March 31, 2021, Tamilnad Mercantile Bank – deposits and advances portfolio in the state of Tamil Nadu has contributed 76.33% to their total Business. Tamilnad Mercantile Bank also focuses on diversifying their growth in other high growth regions of India which will help increase their network and client base. Other than Tamil Nadu, Tamilnad Mercantile Bank is present in 15 other states and 4 union territories of India.
Apart from Tamil Nadu, they have sizable presence in the states of Maharashtra, Gujarat, Karnataka, and Andhra Pradesh with presence across 90 branches and 123 ATMs and 15 CRMs as of June 30, 2021. Tamilnad Mercantile Bank have also been consistently growing their customer base from approximately 4.42 million as of March 31, 2019, approximately 4.66 million as of March 31, 2020 to approximately 4.91 million as of March 31, 2021 at the CAGR of 5.38% from Fiscal 2019 to 2021.
Tamilnad Mercantile Bank have built a strong portfolio of advances and deposits across their customer base.
Advances: Tamilnad Mercantile Bank – advances portfolio primarily consists of lending to (a) Retail customers; (b) agricultural customers and (c) MSMEs (“RAM”).
MSMEs: Tamilnad M
Agricultural customers: Tamilnad Mercantile Bank primarily offers 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 their total advances with a CAGR of 19.27% from March 31, 2019 to March 31, 2021.
Retail customers: Tamilnad Mercantile Bank primarily offers home loans, personal loans, auto loans, educational loans as well as security backed loans of various types to their 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.
Corporate customers: Tamilnad Mercantile Bank offers various kinds of loans to corporates, in textiles and other industries, with their 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 their total advances with a CAGR of (19.74%) from March 31, 2019 to March 31, 2021. This is in line with their strategy to move focus away from corporate customers in favour of RAM.
From Fiscal 2019 to Fiscal 2021, their overall advances portfolio has increased at a CAGR of 8.05%.
Average Ticket Size of Advances
Deposits: Tamilnad Mercantile Bank – deposits portfolio consists of term deposits, recurring deposits, savings bank and current bank accounts amongst others. Total deposits of Tamilnad Mercantile Bank have increased at a CAGR of 8% from ₹ 351,362.47 million in Fiscal 2019 to ₹ 409,704.16 million in Fiscal 2021. During the Fiscals 2019 and 2021, their current account savings accounts (“CASA”) contributed ₹86,577.10 million or 24.64%, and ₹ 116,852.65 million or 28.52% respectively to their total deposits and have grown with a CAGR of 16.18% from March 31, 2019 to March 31, 2021.
Further, during the Fiscals 2019 and 2021, retail term deposits contributed ₹ 223,725.90 million or 84.49%, and ₹ 264,223.41 million or 90.22% respectively to their total deposits and have grown with a CAGR of 8.68% from March 31, 2019 to March 31, 2021.
Tamilnad Mercantile Bank also have healthy renewal rates across their term deposit categories. Their deposits growth rate has been one of the top five amongst Peers in the industry with a growth rate of 8.00% for the year ended March 31, 2021 over Fiscal 2020 (Source: CRISIL Report).
Renewal rates of term deposits
Financial Performance Snapshot
Source – Tamilnad Mercantile Bank IPO DRHP
| Name | Tamilnad Mercantile Bank Limited Unlisted Shares |
|---|---|
| Face Value | ₹ 10 |
| ISIN Code | INE668A01016 |
| Available in Depository | CDSL & NSDL |
| PAN | AAACT5558K |
| Lot Size | 100 Shares |
| Current Unlisted Share Price | ₹ 530 Per Equity Share |
| Particulars | FY 2020-21 | FY 2019-20 | FY 2018-19 |
|---|---|---|---|
| Interest earned | 36,090.53 | 34,661.12 | 32,244.57 |
| Other Income | 6,443.49 | 5,264.17 | 4,143.41 |
| Total Income | 42,534.02 | 39,925.29 | 36,387.98 |
| Interest Expended | 20,715.25 | 21,465.92 | 19,943.05 |
| Total Expenses | 36,500.73 | 35,848.35 | 33,802.18 |
| Net Profit for the year | 6033.29 | 4076.94 | 2585.80 |
| EPS (In INR) | 42.34 | 28.61 | 18.14 |
| Gross NPA to advances (%) | 3.44% | 3.62% | 4.32% |
| Net NPA to advances (%) | 1.98% | 1.80% | 2.40% |
*Rates mentioned in the chart are indicative.
The trend indicator above has been derived from the current demand/supply of Tamilnad Mercantile Bank – TMB Unlisted Shares. The trend has a tendency to change anytime depending on the market conditions and other events. This indicator must not be construed as any recommendation to buy/sell/hold.
Total Number of Outstanding Shares: 142,511,454 (As per DRHP)
Market Cap Scenarios:
At 500 Rs/Share, TMB Unlisted Shares values the company at approx. Rs. 7,125 crores.
This are just pre-defined scenarios, since the market cap is variable to price, you can calculate the latest market cap based on the ongoing rates of TMB unlisted shares.
At 550 Rs/Share, TMB Unlisted Shares values the company at approx. Rs. 7,838 crores.
This are just pre-defined scenarios, since the market cap is variable to price, you can calculate the latest market cap based on the ongoing rates of TMB unlisted shares.
At 600 Rs/Share, TMB Unlisted Shares values the company at approx. Rs. 8,550 crores.
This are just pre-defined scenarios, since the market cap is variable to price, you can calculate the latest market cap based on the ongoing rates of TMB unlisted shares.
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