YES Bank files FPO prospectus with ROC

YES Bank has filed its prospectus with the Registrar of Companies (ROC) to raise about ~15,000 crore by launching a follow-on offer. The offer price band is likely to be in the ~12-15 range, and the offer might be launched as early as next week, said banking sources.

The issue has been filed under the fast-track issues norms, under which companies that meet certain criteria can proceed with the issue by filing a copy of the prospectus with the ROC or letter of offer with stock exchanges and the

Securities and Exchange Board of India (Sebi).

The bank revised its financials for the last three years before the ROC filing. The bank reported a net loss of ~16,418 crore in financial year 2019-20 (FY20).

The bank made additional provisions for the period ending December 2019 of ~15,422 crore as several of its corporate clients defaulted on loans.

The key change in its restated accounts is in the profit and loss accounts for the last three years, while there is no change in assets or liabilities for the period. For example, provisions for bad loans more than doubled in FY18 from ~1,554 crore reported earlier to ~3,526 crore in restated accounts.

The bank also made additional provisions of ~640 crore for FY19. However, provisions for bad loans in FY20 were lowered by ~4,406 crore in the restated books from ~32,718 crore to ~28,312 crore.

On the revenue side, there is an upward revision in fee and other income of ~2,118 crore in FY20 or around 6 per cent, compared to the original account.

However, there is no change in the profit or loss figures, which remain the same as earlier. This keeps the bank’s valuation ratios such as price-toearnings multiple and price-tobook value unchanged.

In the last six months, there has been a significant decline in its deposit base and a sharp rise in the non-performing assets as the new management, led by former State Bank of India executive Prashant Kumar, is trying to resurrect it.

The bank’s deposit base was down 54 per cent year-on-year (YOY) in FY20 to ~1.05 trillion, while total assets were down 32.3 per cent YOY. In comparison, interest earning assets advances and investment were down 29 per cent and 51 per cent YOY, respectively.