The Rs 1,500 crore follow-on public offer (FPO) by private sector lender YES Bank was subscribed 24 per cent on the first day of the bidding process on Wednesday. The issue, which can be bid with minimum lot size of 1,000 equity shares and multiples thereafter, will close on July 17.
At a price band of Rs 12-13, the portion reserved for institutional investors was subscribed 66 per cent, while the non institutional quote was subscribed 4 per cent. Retail category of YES Bank FPO was subscribed 9 per cent and the employees portion was subscribed 5 per cent.
On Wednesday, YES Bank in a regulatory filing said that it has raised Rs 4,098.46 crore from anchor investors by allotting 3,415,384,614 equity shares at Rs 12 per equity share, which may be subject to change upon determination of the offer price. The anchor investors include US-based alternative asset manager Tilden Park Capital Management LP, Singapore-based fund management company Amansa Capital and UK-based fund management firm Jupiter Fund.
Tilden Park, through its investment vehicle BayTree India Holdings, is the largest investor in the FPO and has invested over Rs 2,250 crore in the lender. The other investors who have received an allotment in the anchor book include HDFC Life Insurance, Amansa Holdings, Jupiter India Fund, Edelweiss Crossover Opportunities Fund, ECL Finance, Elara Capital, Hinduja Leyland Finance, Bajaj Allianz Life Insurance, ICICI Lombard General Insurance, Reliance General Insurance and RBL Bank, among others.
State Bank of India, the largest investor in YES Bank, will invest up to Rs 1,760 crore in the FPO. The proposed investment will ensure that its holding in the bank does not fall below 26 per cent after the FPO.
Cash-strapped YES Bank is raising capital to take the load of higher NPA provisioning, deteriorating asset quality and the capital for future growth. Following the FPO, the bank's capital adequacy ratio will rise to 13 per cent from the existing 6.3 per cent, which is lower than the RBI's minimum requirement of 7.3 for 2019-20.
Prashant Kumar, Managing Director and Chief Executive Officer of YES Bank, in a press meet on Monday said that the bank intends to use fund proceeds to meet growth requirements for two years. He said the fund will be used as buffer provisioning. He, however, said the provisioning against the impact of COVID-19 will not be more than 100 bps.
The board of the private lender on July 10 approved issuance of equity shares at a face value of Rs 2 per share at a floor price of Rs 12 per share with a cap of Rs 13 per share, which is almost 50 per cent lower than the current market price of Rs 20.45 per share. The bank has reserved a portion of up to Rs 200 crore for employees in the forthcoming FPO, where a discount of Rs 1 per equity share will be given to the eligible employees.
As per YES Bank's red herring prospectus (RHP), the quote for retain investor has been fixed at a minimum of 35 per cent of the offered size, while a minimum of 15 per cent of shares has been reserved for non-institutional investors. Qualified institutional buyers' (QIB) portion for investment has been kept at 50 per cent of the total issue size.
Meanwhile, shares of YES Bank ended 2.39 per cent lower at Rs 20.45 per share on the Bombay Stock Exchange on Wednesday. The stock hit an intraday high and low of Rs 22 and Rs 20.30, respectively.