Private sector lender Tamilnad Mercantile Bank has filed preliminary papers with capital market regulator Sebi to mop up funds through an initial share sale.

The initial public offering (IPO) comprises fresh issue of 15,827,495 equity shares and an offer for sale of up to 12,505 equity shares by selling shareholders, according to the draft red herring prospectus (DRHP).

The offer for sale consists of of up to 5,000 equity shares each by D. Prem Palanivel and Priya Rajan, up to 1,000 equity shares by Prabhakar Mahadeo Bobde, up to 505 equity shares by Narasimhan Krishnamurthy and up to 500 equity shares each by M. Malliga Rani and Subramanian Venkiteshwaran Iyer.

The Tuticorin-based bank proposes to utilise the net proceeds from the fresh issue to augment its Tier–I capital base to meet its future capital requirements.

Tamilnad Mercantile Bank is one of the oldest private sector banks in the country with a history of almost 100 years. It offers a wide range of banking and financial services primarily to micro, small and medium enterprises (MSME), agricultural and retail customers.

As on June 30, 2021, the bank has 509 branches, of which 106 branches are in the rural, 247 in the semi-urban, 80 in the urban and 76 in the metropolitan centres. As on June 30, 2021, it had a customer base of 4.93 million of which 70 per cent comprised customers who were associated with the bank for more than five years.

Axis Capital Ltd, Motilal Oswal Investment Advisors Ltd and SBI Capital Markets Ltd are the book running lead managers to the public issue.

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