Companies have started to come up with their Initial Public Offering (IPO) after a halt of approximately three months. In the past four weeks, two mainboard IPOs have hit the market.
The third and upcoming IPO is floated by Tamilnad Mercantile Bank Limited. It is looking to raise Rs. 831.60 Crores from the markets. The issue will open for subscription on September 5th, 2022, and close on September 7th, 2022.
However, the company has run into legal issues after three of its shareholders- Robert and Ardis James Co, East River Holdings Ltd, and Swiss Re Investors (Mauritius) Ltd are seeking a stay on the public offer.
Originally the bank planned a mix of Fresh issue and Offer for sale (OFS) while drafting its draft red herring prospectus (DRHP). Later, they scrapped the decision on the OFS. post this the investors wanted the bank to file a fresh DRHP with SEBI. However, the regulator did not find merit in the argument and did not ask to file for a new draft.
This led the shareholders to file a petition before Securities Appellate Tribunal (SAT) to adjudicate if the bank can go ahead with its listing next week. The matter was slated to be heard on 6 September.
However, senior counsel Janak Dwarkadas, appearing on behalf of shareholders, sought an urgent hearing since the public offer opens on September 5th. Securities Appellate Tribunal (SAT) will hear the matter on Friday, September 2nd.
As per market observers in the Grey market, the shares of Tamilnad Mercantile Bank traded at a premium of 6.48% on September 2nd at Rs 559 against its cap price of Rs 525.
Tamilnad Mercantile Bank Limited (TMB) is one of the oldest and leading old private sector banks in India with a history of close to 100 years which caters to micro, small and medium enterprises (“MSME”), agricultural and retail customers (“RAM”).
As of June 30, 2021, the bank has 509 branches with an overall customer base of approximately 4.93 million.
Written by – Anoushka Roy
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