The Madras High Court has revealed Tamilnad Mercantile Bank (TMB)'s resolution on IPO and all other related resolutions that were passed, including that of the election of directors. All the resolutions, which were submitted to the court in a sealed cover, were passed with more than one third of the votes polled, including that of IPO.
It may be noted that the bank has, since 2016, been seeking the nod of its shareholders who are largely from the Nadar community, to go public, but the majority has been rejecting the proposal. At the 93rd AGM held in 2016, when the proposal for an initial public offer was placed before the shareholders for the first time, it was declined.
The lender held four AGMs between 2015-16 and 2018-19 (94th AGM to 97th AGM), and the one held last month was under the supervision of the Madras High Court. The voting results were given to the Court in a sealed cover.
While the formal order of the Court was not uploaded, it dictated the voting results wherein it was stated nearly 75 per cent of the shareholders approved the IPO.
The bank's former Chairman and Director, S Annamalai, and others have confirmed the development and expect TMC to be listed within the next 12 months.
It may be recalled that RBI has been asking the Bank to list for a few years now.
According to Annamalai, the IPO will also help unlock shareholders' value.
According to some shareholders, TMC's share is trading at around Rs 400 per share outside the public market.
The IPO would also help enhance visibility, help customer acquisition, provide liquidity to existing shareholders, increasing the ability to raise affordable capital faster and enhance brand and corporate value. IPO will also strengthen the Bank's capital adequacy ratio (CAR) and will help to expand its branches.
In 2019, the Bank posted a net profit of Rs 407.56 crore (Rs 258.58 crore in 2018) . Its total business stood at Rs 64,540.79 crore as against Rs 61,624.59 crore
The Bank has been mired in ownership tussles in the past and has got into various disputes, ever since FIs bought the stake from businessman C Sivasankaran, who had acquired the stake from the Essar Group.
The transaction to FIs has also attracted a show-cause notice from the Enforcement Directorate to TMB and Standard Chartered Bank, among others, for contravention of the Foreign Exchange Management Act (Fema) 1999 earlier. The battle to control the Bank still continues among three different groups from the community.
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