Yes Bank FPO Falls Short Of 100% Subscription, Rs 14,267 Crore Raised
An FPO needs at least 90% subscription to be closed successfully.
Yes Bank Ltd. raised Rs 14,267 crore through its follow-on public offer, mopping up capital to shore up its buffers that have fallen below the regulatory thresholds.
The Yes Bank FPO, which aimed to raise Rs 15,000 crore, was subscribed 95% on the final day on Friday, according to according to details shared by Axis Capital, one of the lead managers. An FPO needs at least 90% subscription to be closed successfully.
The portion allotted to qualified institutional buyers was subscribed 1.9 times, while the part set aside for non-institutional buyers was subscribed 63%. Retail investors pumped in Rs 2,421 crore while the bank’s employees invested Rs 65.07 crore through the offer.
The bank said in a statement that the portion left unsubscribed would be allotted to SBI Capital Markets, which had agreed to underwrite Rs 3,000 crore worth of shares at the lowest end of the price band.
Some of the large institutions that subscribed to the Yes Bank FPO include State Bank of India, Life Insurance Corporation of India, SBI Life Insurance, Punjab National Bank, Union Bank of India and Edelweiss, among others, according to a person with direct knowledge of the matter.
On July 14, Yes Bank raised Rs 4,098 crore from anchor investors, who purchased its shares at Rs 12 apiece. U.S.-based investor Tilden Park, through its Indian unit Bay Tree Capital, invested the bulk of the amount—or around Rs 2,250 crore. Other prominent investors included HDFC Standard Life Insurance Co., Amansa Holdings, Elara India Opportunities Fund and Jupiter India Fund.
State Bank of India had said last week that it will invest up to Rs 1,760 crore in the FPO.
Yes Bank is in need of a capital infusion even as a clutch of eight lenders, led by State Bank of India, pumped in more than Rs 10,000 crore in March as part of a rescue package approved by the Reserve Bank of India. The private lender had to then written off Rs 8,415 crore of additional tier-1 bonds.
Its CET-1 ratio and tier-1 capital ratio stood at 6.3% and 6.5%, respectively, as on March 31, compared with the minimum requirements of 7.375% and 8.875%.
During a press conference to announce the FPO, Yes Bank’s Managing Director and Chief Executive Prashant Kumar said the fundraising should help manage its capital adequacy for two years. After the issue, the bank’s capital adequacy ratio will rise to 13%. Kumar expects this to be enough to meet the bank’s growth needs for the next two years, he told BloombergQuint in an interview. He said the bank is adequately provided against stressed assets and would use the funds received for growth.
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On Friday, Yes Bank shares rose 2.86% to Rs 19.80 apiece on the BSE while the benchmark Sensex gained 1.50% to end the day at 37,020.14 points.