PROSPECTUS
Dated: September 8, 2022
Please read Section 32 of the Companies Act, 2013
100% Book Built Offer
(Please scan this QR code to view the Prospectus)
TAMILNAD MERCANTILE BANK LIMITED
CORPORATE IDENTIFICATION NUMBER: U65110TN1921PLC001908
REGISTERED AND CORPORATE | CONTACT PERSON | TELEPHONE AND EMAIL | WEBSITE | ||||||||
OFFICE | |||||||||||
No. 57, Victoria Extension Road, | Prakash Chandra Panda, Company | Telephone no.: +91 461 2323666 | www.tmb.in | ||||||||
Thoothukudi - 628 002, Tamil Nadu, India | Secretary and Compliance Officer | Email:secretarial@tmbank.in | |||||||||
OUR BANK IS A PROFESSIONALLY MANAGED BANK AND DOES NOT HAVE AN IDENTIFIABLE PROMOTER | |||||||||||
DETAILS OF OFFER | |||||||||||
Type | Fresh Issue | Total Offer size | Eligibility and Reservations | ||||||||
Fresh Issue | Fresh Issue of | 15,840,000 Equity | The Offer was made pursuant to Regulation 6(2) of the SEBI ICDR Regulations. | ||||||||
15,840,000 Equity | Shares | ||||||||||
For further details, see "Other Regulatory and Statutory Disclosures - Eligibility | |||||||||||
Shares aggregating | aggregating to ₹ | ||||||||||
for the Offer" on page 307. For details in relation to share reservation among | |||||||||||
to ₹ 8,078.40* | 8,078.40* million | ||||||||||
QIBs, NIBs and RIBs, see "Offer Structure" on page 322. | |||||||||||
million | |||||||||||
*Subject to finalisation of the Basis of Allotment |
RISKS IN RELATION TO THE FIRST OFFER
This being the first public issue of the Equity Shares of our Bank, there has been no formal market for the Equity Shares. The face value of each Equity Share is ₹ 10. The Floor Price and the Cap Price (determined by our Bank in consultation with the BRLMs), and Offer Price (determined by our Bank in consultation with the BRLMs), in accordance with the SEBI ICDR Regulations and on the basis of the assessment of market demand for the Equity Shares by way of the Book Building Process, as stated under "Basis for the Offer Price" beginning on page 85, should not be taken to be indicative of the market price of the Equity Shares after the Equity Shares are listed. No assurance can be given regarding an active or sustained trading in the Equity Shares or regarding the price at which the Equity Shares will be traded after listing.
GENERAL RISKS
Investments in equity and equity-related securities involve a degree of risk and investors should not invest any funds in this Offer unless they can afford to take the risk of losing their investment. Investors are advised to read the Risk Factors carefully before taking an investment decision in this Offer. For taking an investment decision, investors must rely on their own examination of our Bank and the Offer, including the risks involved. The Equity Shares have not been recommended or approved by the Securities and Exchange Board of India ("SEBI"), nor does SEBI guarantee the accuracy or adequacy of the contents of this Prospectus. Specific attention of the investors is invited to "Risk Factors" beginning on page 20.
BANK'S ABSOLUTE RESPONSIBILITY
Our Bank, having made all reasonable inquiries, accepts responsibility for and confirms that this Prospectus contains all information with regard to our Bank and the Offer, which is material in the context of the Offer, that the information contained in this Prospectus is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this Prospectus as a whole or any of such information or the expression of any such opinions or intentions, misleading in any material respect.
LISTING
The Equity Shares offered through the Red Herring Prospectus and this Prospectus are proposed to be listed on BSE and NSE. We have received in-principle approvals from BSE and NSE for the listing of the Equity Shares pursuant to letters each dated May 25, 2022. For the purpose of this Offer, BSE is the Designated Stock Exchange. A signed copy of the Red Herring Prospectus has been, and a signed copy of this Prospectus shall be, filed with the RoC in accordance with Section 26(4) of the Companies Act, 2013. For details of the material contracts and documents that were available for inspection from the date of the Red Herring Prospectus up to the Bid/Offer Closing Date, see "Material Contracts and Documents for Inspection" beginning on page 350.
BOOK RUNNING LEAD MANAGERS
Axis Capital Limited | Ankit Bhatia/ Pavan Naik | Tel: +91 22 4325 2183 | ||||||||||
Email:tmb.ipo@axiscap.in | ||||||||||||
Motilal Oswal Investment | Ritu Sharma | Tel: +91 22 7193 4380 | ||||||||||
Advisors Limited | Email:tmb.ipo@motilaloswal.com | |||||||||||
SBI Capital Markets | Karan Savardekar | Tel: +91 22 2217 8300 | ||||||||||
Limited | Email:tmb.ipo@sbicaps.com | |||||||||||
REGISTRAR TO THE OFFER | ||||||||||||
Name of Registrar | Contact Person | Email and Telephone | ||||||||||
Link Intime India Private Limited | Shanti Gopalkrishnan | Tel: +91 22 4918 6200 | ||||||||||
Email:tmb.ipo@linkintime.co.in | ||||||||||||
BID/ OFFER PROGRAMME | ||||||||||||
ANCHOR INVESTOR | FRIDAY, | BID/OFFER | MONDAY, | BID/OFFER | WEDNESDAY, | |||||||
BIDDING DATE | SEPTEMBER 2, 2022 | OPENED ON | SEPTEMBER 5, 2022 | CLOSED ON | SEPTEMBER 7, 2022 |
PROSPECTUS
Dated: September 8, 2022
Please read Section 32 of the Companies Act, 2013
100% Book Built Offer
TAMILNAD MERCANTILE BANK LIMITED
Our Bank was incorporated in the name of 'Nadar Bank Limited' on May 11, 1921 at Thoothukudi, Tamil Nadu as a limited company under the Indian Companies Act, 1913 pursuant to a certificate of incorporation issued by the erstwhile Assistant Registrar of Joint Stock, Palamcottah. Our Bank commenced its business on November 11, 1921 at Thoothukudi, Tamil Nadu. Subsequently, the name of our Bank was changed to 'Tamilnad Mercantile Bank Limited', with effect from November 27, 1962, pursuant to a letter of approval from the Government of India dated November 14, 1962 and a fresh certificate of incorporation dated July 17, 1968 was issued by the Assistant Registrar of Companies, Madras. For further details in relation to the changes in the registered office, see "History and Certain Corporate Matters" beginning on page 157.
Registered and Corporate Office: No. 57, Victoria Extension Road, Thoothukudi - 628 002, Tamil Nadu, India; Tel: +91 461 2325136
Contact Person: Prakash Chandra Panda, Company Secretary and Compliance Officer; Tel: +91 461 2323666
E-mail: secretarial@tmbank.in; Website: www.tmb.in
Corporate Identity Number: U65110TN1921PLC001908
OUR BANK IS A PROFESSIONALLY MANAGED BANK AND DOES NOT HAVE AN IDENTIFIABLE PROMOTER
INITIAL PUBLIC OFFERING OF 15,840,000 EQUITY SHARES OF FACE VALUE OF ₹ 10 EACH ("EQUITY SHARES") OF TAMILNAD MERCANTILE BANK LIMITED ("BANK" OR "ISSUER") FOR CASH AT A PRICE OF ₹ 510 PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF ₹ 500 PER EQUITY SHARE) (THE "OFFER PRICE") AGGREGATING TO ₹ 8,078.40 MILLION* (THE "OFFER") COMPRISING A FRESH ISSUE OF 15,840,000 EQUITY SHARES AGGREGATING TO ₹ 8,078.40 MILLION (THE
"OFFER"). THE OFFER CONSTITUTED 10.00% OF OUR POST-OFFERPAID-UP EQUITY SHARE CAPITAL.
THE OFFER PRICE IS ₹510 PER EQUITY SHARE AND THE OFFER PRICE IS 51 TIMES THE FACE VALUE OF THE EQUITY SHARES
* SUBJECT TO FINALISATION OF THE BASIS OF ALLOTMENT
The Offer was made through the Book Building Process, in terms of Rule 19(2)(b) of the Securities Contracts (Regulation) Rules, 1957, as amended ("SCRR") read with Regulation 31 of the SEBI ICDR Regulations and in compliance with Regulation 6(2) of the SEBI ICDR Regulations, wherein not less than 75 % of the Offer was allotted on a proportionate basis to Qualified Institutional Buyers ("QIBs", the "QIB Portion"). Our Bank, in consultation with the Book Running Lead Managers, allocated 60% of the QIB Portion to Anchor Investors on a discretionary basis in accordance with the SEBI ICDR Regulations ("Anchor Investor Portion"), of which one-third was reserved for domestic Mutual Funds, subject to valid Bids being received from domestic Mutual Funds at or above the Anchor Investor Allocation Price. Further, 5% of the Net QIB Portion was available for allocation on a proportionate basis only to Mutual Funds, and the remainder of the Net QIB Portion was available for allocation on a proportionate basis to all QIBs, including Mutual Funds, subject to valid Bids being received at or above the Offer Price. However, if the aggregate demand from Mutual Funds was less than 5% of the Net QIB Portion, the balance Equity Shares available for allocation in the Mutual Fund Portion could have been added to the remaining Net QIB Portion for proportionate allocation to QIBs. Further, not more than 15% of the Offer was available for allocation to Non-Institutional Bidders ("Non-InstitutionalPortion") of which one-third of the Non- Institutional Portion was available for allocation to Bidders with an application size of more than ₹ 200,000 and up to ₹ 1,000,000 and two-thirds of the Non-Institutional Portion was available for allocation to Bidders with an application size of more than ₹ 1,000,000 and under-subscription in either of these two sub-categories of Non-Institutional Portion may have been allocated to Bidders in the other sub-category of Non-Institutional Portion in accordance with the SEBI ICDR Regulations, subject to valid Bids being received at or above the Offer Price. Further, not more than 10% of the Offer was available for allocation to Retail Individual Bidders ("Retail Portion") in accordance with the SEBI ICDR Regulations, subject to valid Bids being received at or above the Offer Price. All potential Bidders (except Anchor Investors) were required to mandatorily utilise the Application Supported by Blocked Amount ("ASBA") process providing details of their respective ASBA accounts, and UPI ID in case of UPI Bidders using the UPI Mechanism, if applicable, in which the corresponding Bid Amounts were blocked by the SCSBs or by the Sponsor Bank(s) under the UPI Mechanism, as the case may be, to the extent of respective Bid Amounts. Anchor Investors were not permitted to participate in the Offer through the ASBA process. For details, see "Offer Procedure" beginning on page 326.
RISKS IN RELATION TO THE FIRST OFFER
This being the first public issue of the Equity Shares of our Bank, there has been no formal market for the Equity Shares. The face value of each Equity Share is ₹ 10. The Floor Price and the Cap Price (determined by our Bank in consultation with the BRLMs), and Offer Price (determined by our Bank in consultation with the BRLMs), in accordance with the SEBI ICDR Regulations and on the basis of the assessment of market demand for the Equity Shares by way of the Book Building Process, as stated under "Basis for the Offer Price" beginning on page 85, should not be taken to be indicative of the market price of the Equity Shares after the Equity Shares are listed. No assurance can be given regarding an active or sustained trading in the Equity Shares or regarding the price at which the Equity Shares will be traded after listing.
GENERAL RISKS
Investments in equity and equity-related securities involve a degree of risk and investors should not invest any funds in this Offer unless they can afford to take the risk of losing their investment. Investors are advised to read the Risk Factors carefully before taking an investment decision in this Offer. For taking an investment decision, investors must rely on their own examination of our Bank and the Offer, including the risks involved. The Equity Shares have not been recommended or approved by the Securities and Exchange Board of India ("SEBI"), nor does SEBI guarantee the accuracy or adequacy of the contents of this Prospectus. Specific attention of the investors is invited to "Risk Factors" beginning on page 20.
BANK'S ABSOLUTE RESPONSIBILITY
Our Bank, having made all reasonable inquiries, accepts responsibility for and confirms that this Prospectus contains all information with regard to our Bank and the Offer, which is material in the context of the Offer, that the information contained in this Prospectus is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this Prospectus as a whole or any of such information or the expression of any such opinions or intentions, misleading in any material respect.
LISTING
The Equity Shares offered through the Red Herring Prospectus are proposed to be listed on BSE and NSE. We have received in-principle approvals from BSE and NSE for the listing of the Equity Shares pursuant to letters each dated May 25, 2022. For the purpose of this Offer, BSE is the Designated Stock Exchange. A signed copy of the Red Herring Prospectus has been, and a signed copy of this Prospectus shall be, filed with the RoC in accordance with Section 26(4) of the Companies Act, 2013. For details of the material contracts and documents that were available for inspection from the date of the Red Herring Prospectus up to the Bid/Offer Closing Date, see "Material Contracts and Documents for Inspection" beginning on page 350.
BOOK RUNNING LEAD MANAGERS | REGISTRAR TO THE OFFER |
Axis Capital Limited | Motilal Oswal Investment Advisors Limited | SBI Capital Markets Limited | Link Intime India Private Limited | ||
1st Floor, Axis House | Motilal Oswal Tower, Rahimtullah, Sayani | 202, Maker Tower 'E' | C-101, 1st Floor, 247, Lal Bahadur Shastri | ||
C 2, Wadia International Centre | Road Opposite Parel ST Depot, | Cuffe Parade, Mumbai 400 005 | Marg, | ||
P.B. Marg, Worli | Prabhadevi, Mumbai 400 025 | Maharashtra, India | Vikhroli (West), Mumbai 400 083 | ||
Mumbai 400 025 | Maharashtra, India | Tel: +91 22 2217 8300 | Maharashtra, India | ||
Maharashtra, India | Tel: +91 22 7193 4380 | E-mail: tmb.ipo@sbicaps.com | Tel: +91 22 4918 6200 | ||
Tel: +91 22 4325 2183 | E-mail: tmb.ipo@motilaloswal.com | Website: www.sbicaps.com | E-mail: tmb.ipo@linkintime.co.in | ||
E-mail: tmb.ipo@axiscap.in | Website: www.motilaloswalgroup.com | Investor grievance e-mail: | Website: www.linkintime.co.in | ||
Website: www.axiscapital.co.in | Investor | grievance | e-mail: | investor.relations@sbicaps.com | Investor grievance e-mail: |
Investor grievance email: | moiaplredressal@motilaloswal.com | Contact person: Karan Savardekar | tmb.ipo@linkintime.co.in | ||
complaints@axiscap.in | Contact person: Ritu Sharma | SEBI registration no.: INM000003531 | Contact person: Shanti Gopalkrishnan | ||
Contact person: Ankit Bhatia/ Pavan Naik | SEBI registration no.: INM000011005 | SEBI registration no.: INR000004058 | |||
SEBI registration no: INM000012029 | |||||
BID/OFFER PERIOD | |||||
BID/OFFER OPENED ON* | Monday, September 5, 2022 | BID/OFFER CLOSED ON | Wednesday, September 7, 2022 |
*The Anchor Investor Bid/Offer Period was one Working Day prior to the Bid/Offer Opening Date.
(This page is intentionally left blank)
TABLE OF CONTENTS | |
OFFER DOCUMENT SUMMARY ............................................................................................................. | 11 |
CERTAIN CONVENTIONS, PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA | |
AND CURRENCY OF PRESENTATION................................................................................................... | 15 |
FORWARD LOOKING STATEMENTS .................................................................................................... | 18 |
SECTION II: RISK FACTORS ........................................................................................................................ | 20 |
SECTION III: INTRODUCTION .................................................................................................................... | 59 |
THE OFFER ................................................................................................................................................... | 59 |
SUMMARY OF FINANCIAL INFORMATION ........................................................................................ | 60 |
GENERAL INFORMATION........................................................................................................................ | 64 |
CAPITAL STRUCTURE .............................................................................................................................. | 72 |
OBJECTS OF THE OFFER ......................................................................................................................... | 81 |
BASIS FOR THE OFFER PRICE................................................................................................................ | 85 |
STATEMENT OF POSSIBLE SPECIAL TAX BENEFITS...................................................................... | 88 |
SECTION IV ABOUT OUR BANK ................................................................................................................. | 90 |
INDUSTRY OVERVIEW ............................................................................................................................. | 90 |
OUR BUSINESS........................................................................................................................................... | 113 |
KEY REGULATIONS AND POLICIES ................................................................................................... | 138 |
HISTORY AND CERTAIN CORPORATE MATTERS.......................................................................... | 157 |
OUR MANAGEMENT ................................................................................................................................ | 162 |
OUR PRINCIPAL SHAREHOLDERS...................................................................................................... | 182 |
OUR GROUP COMPANY .......................................................................................................................... | 183 |
DIVIDEND POLICY ................................................................................................................................... | 184 |
SELECTED STATISTICAL INFORMATION ........................................................................................ | 185 |
SECTION V: FINANCIAL INFORMATION ............................................................................................... | 200 |
FINANCIAL STATEMENTS ..................................................................................................................... | 200 |
OTHER FINANCIAL INFORMATION ................................................................................................... | 263 |
RELATED PARTY TRANSACTIONS ..................................................................................................... | 264 |
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS | |
OF OPERATION ......................................................................................................................................... | 265 |
CAPITALISATION STATEMENT ........................................................................................................... | 292 |
FINANCIAL INDEBTEDNESS.................................................................................................................. | 293 |
SECTION VI: LEGAL AND OTHER INFORMATION ............................................................................. | 294 |
OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS .............................................. | 294 |
GOVERNMENT AND OTHER APPROVALS ........................................................................................ | 305 |
OTHER REGULATORY AND STATUTORY DISCLOSURES............................................................ | 307 |
SECTION VII: OFFER INFORMATION ..................................................................................................... | 316 |
TERMS OF THE OFFER ........................................................................................................................... | 316 |
OFFER STRUCTURE................................................................................................................................. | 322 |
OFFER PROCEDURE ................................................................................................................................ | 326 |
RESTRICTION ON FOREIGN OWNERSHIP OF INDIAN SECURITIES......................................... | 343 |
SECTION VIII: DESCRIPTION OF EQUITY SHARES AND TERMS OF ARTICLES OF | |
ASSOCIATION ................................................................................................................................................ | 344 |
SECTION IX: OTHER INFORMATION ..................................................................................................... | 350 |
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION................................................. | 350 |
DECLARATION .......................................................................................................................................... | 354 |
SCHEDULE 1 ............................................................................................................................................... | 368 |
SCHEDULE 1A ............................................................................................................................................ | 384 |
SCHEDULE 2 ............................................................................................................................................... | 397 |
ANNEXURE A ............................................................................................................................................. | 399 |
SECTION I: GENERAL
DEFINITION AND ABBREVIATIONS
This Prospectus uses certain definitions and abbreviations which, unless the context otherwise indicates or implies, or unless otherwise specified, shall have the meaning as provided below. References to any legislations, acts, regulations, rules, guidelines, circulars, notifications, clarifications or policies shall be to such legislations, acts, regulations, rules, guidelines or policies as amended, updated, supplemented, re-enacted or modified, from time to time, and any reference to a statutory provision shall include any subordinate legislation made, from time to time, under such provision.
Offer related terms used but not defined in this Prospectus shall have the meaning ascribed to such terms under the General Information Document. Any other words and expressions used but not defined in this Prospectus shall have the meaning ascribed to such terms under the SEBI ICDR Regulations, the Companies Act, 2013, the SCRA, and the Depositories Act and the rules and regulations made thereunder.
The terms not defined herein but used in "Statement of Possible Special Tax Benefits", "Industry Overview", "Key Regulations and Policies", "Selected Statistical Information", "Financial Statements", "Outstanding Litigation and Material Developments", "Description of Equity Shares and Terms of Articles of Association" and "Offer Procedure" beginning on pages 88, 90, 138, 185, 200, 294, 344 and 326, respectively, shall have the meanings ascribed to such terms in these respective sections.
General Terms
Term | Particular |
Our Bank/ the Bank/ the | Tamilnad Mercantile Bank Limited, a company incorporated under the Indian Companies Act, |
Issuer | 1913 and registered as a bank with the RBI, having its Registered and Corporate Office at No. |
57, Victoria Extension Road, Thoothukudi 628 002, Tamil Nadu, India | |
we/ us/ our | Unless the context otherwise indicates or implies, refers to our Bank |
Bank Related Terms
Term | Description |
Articles of Association/ | Articles of association of our Bank, as amended |
AoA or Articles | |
Audit Committee | Audit committee of our Board, as described in "Our Management" beginning on page 162 |
Board/ Board of | Board of directors of our Bank |
Directors | |
Chief Financial Officer / | P.A. Krishnan, chief financial officer of our Bank |
CFO | |
Company Secretary and | Prakash Chandra Panda, company secretary and compliance officer of our Bank |
Compliance Officer | |
Corporate Social | Corporate social responsibility committee of our Board, as described in "Our Management" |
Responsibility | beginning on page 162 |
Committee | |
Director(s) | The director(s) on our Board |
Equity Shares | The equity shares of our Bank of face value of ₹ 10 each |
Executive Director(s) | The executive director(s) of our Bank |
Independent Directors | Independent directors on our Board, as described in "Our Management" beginning on page |
162 | |
Joint Statutory Central | M/s Suri & Co, Chartered Accountants, and M/s Abarna & Ananthan, Chartered Accountants, |
Auditors | the current joint statutory central auditors of our Bank |
Key Managerial | Key managerial personnel of our Bank shall have the meaning as set out under Regulation |
Personnel or KMP | 2(1)(bb) of the SEBI ICDR Regulations and as described in "Our Management" beginning on |
page 162 | |
Managing Director and | Krishnan Sankarasubramaniam, the managing director and chief executive officer of our Bank |
Chief Executive Officer/ | |
MD & CEO | |
Memorandum of | Memorandum of association of our Bank, as amended |
Association or MoA | |
Nomination and | Nomination and Remuneration Committee of our Board, as described in "Our Management" |
Remuneration | beginning on page 162 |
Committee |
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Tamilnad Mercantile Bank Ltd. published this content on 19 September 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 September 2022 15:28:24 UTC.