Yes Bank’s $2 bn FPO opens today (Wednesday)

Bay Tree India Holdings largest anchor investor

MUMBAI: Yes Bank’s follow-on public offering (FPO) to raise Rs15,000 crore (apprx $2 billion) opens on Wednesday (July 15).

Thus, the FPO by the private sector lender Yes Bank, which has been in the news for varied reasons including for recently having State Bank of India (SBI) as the largest investor in the bank, is making another headline by becoming the name behind the largest FPO ever by any entity.

The bank that had starved for capital for long following the disputes among the promoters said Rs15,000 crore capital would suffice for the growth requirements of the bank for the next two years.

Besides SBI, the troubled lender has been backed by HDFC, ICICI Bank, Axis Bank, Kotak Mahindra Bank, Federal Bank, Bandhan Bank and IDFC First Bank, who together invested Rs10,000 crore in Yes Bank through a reconstruction scheme in March under the guidance of RBI.

The bank has a network of 1,135 branches and 1,423 ATMs. Yes Bank CEO Prashant Kumar explained the bank chose the follow-on public offer (FPO) route because it was the only way to offer shares at a reduced price.


Things to note

1) FPO will open on July 15 and close on July 17. Bids can be made for minimum 1,000 shares and in multiples of 1,000 shares thereafter.

2) The floor price has been set at Rs12 per equity share, about 45 per cent lower than the market price. Employees bidding in Employee Reservation Portion will be eligible for a discount of Rs1 per share.

3) Shares worth Rs200 crore have been reserved for subscription by the bank’s employees.

4) The issue opened for anchor investors on Tuesday (July 14) and the bank raised nearly Rs4,100 crore from anchor investors ahead of the FPO opening. Yes Bank’s board had approved allocation of equity shares to anchor investors at Rs12 per share. The private lender allotted 3,41,53,84,614 (around341.54 crore) equity shares to a total of 14 anchor investors.

5) While Bay Tree India Holdings picked 187.50 crore shares constituting 54.90 per cent allocated for anchor investors, the other investors include HDFC Life Insurance, Amansa Holdings, Jupiter India Fund, Bajaj Allianz Life Insurance, ICICI Lombard General Insurance, Reliance General Insurance, RBL Bank, Edelweiss Crossover Opportunities Fund, ECL Finance, Elara Capital and Hinduja Leyland Finance.

6) Yes Bank CEO, Prashant Kumar said, “With the FPO, the common equity tier-1 (CET-1) capital will go from 6.3 per cent to almost 13 per cent. It will take care of the growth requirement for two years. In addition to the capital, we also have comfort of 2.50 per cent in deferred tax assets (DTA). The 13 per cent CET is 5 percentage points over the regulatory requirement.”

7) India’s largest lender SBI said its board approved an investment of up to Rs1,760 crore in the FPO offer of Yes Bank.

8) Kotak Mahindra Capital Company, SBI Capital Markets, Axis Capital, Citigroup Global Markets India Pvt Ltd, DSP Merrill Lynch, HSBC Securities and Capital Markets (India) Pvt Ltd, ICICI Securities and YES Securities (India) Ltd are the merchant bankers of the issue.


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