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GMP, What Experts Say About Listing Gains

Tamilnad Mercantile Bank IPO Listing Tomorrow: Tamilnad Mercantile Bank (TMB) will list its shares on India’s stock exchanges on September 15. The bank’s initial public offering (IPO) of 15.8 million shares at Rs 500-525 apiece earlier in September was oversubscribed 2.8 times. The funds raised will be used to meet future capital requirements, said TMB, perhaps the last of the community-led private banks in the country to get listed.

Tamilnad Mercantile Bank IPO’s Subscription

The qualified institutional buyers (QIBs) category was subscribed 1.62 times. The Non-Institutional Investors (NIIs) category was subscribed 2.94 times. The Retail Individual Investors (RIIs) category was subscribed 6.48 times.

Tamilnad Mercantile Bank IPO Valuation

At the current valuation, TMB is seen demanding a richer valuation compared to its peers given that TMB is outperforming its peers on the majority of financial parameters, Narendra Solanki, head (equity research) at Anand Rathi Shares & Stock Brokers, said. The brokerage had recommended a “subscribe-long term” rating to the IPO because of its consistency in performance and the healthy return ratio.

Tamilnad Mercantile Bank IPO: GMP Today

As per the information available on BSE, the equity shares of Tamilnad Mercantile Bank Limited shall be listed and admitted to dealings on the BSE and NSE in due course. So, all eyes are now set on Tamilnad Mercantile Bank IPO listing date. Meanwhile, the grey market is also signaling about the kind of debut Tamilnad Mercantile Bank shares may have. According to market observers, Tamilnad Bank IPO GMP (grey market premium) today is Rs 15 which means shares of Tamilnad Mercantile Bank are available at a premium of Rs 15 in grey market today.

However, stock market experts said that GMP is not an ideal indicator about the possible premium on the listing date. They said that grey market premium is completely speculative and it has no fundamental connection with the stock. They advised allottees to stick with their conviction and suggested following what its balance sheet says.

What to Expect?

Aayush Agrawal, Senior Research Analyst, Swastika Investmart Ltd., said: “We expect a flat or a negative listing based on the current GMP or Rs.12 i.e. 2.5 per cent over its issue price and less than stellar subscription numbers. We had assigned avoid rating because of the precarious legal challenges and the lack of complete clarity on the management’s long-term performance despite the improvement in fundamentals in the last three years.”

TMB, founded in 1921, had been in the public eye of late due to squabbles among the promoters. The four promoter outfits – comprising trading members of the Nadar community – belonged to four towns in Tamil Nadu and the bonhomie among them had given way to mutual distrust over the way the bank was functioning, or rather run by a section.

The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.

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