YES BANK FPO SAILS THROUGH WITH 93% SUBSCRIPTION

Subscription crosses the mandatory 90 per cent level, but the demand falls short of the ~15,000-crore mark

The YES Bank follow-on public offering (FPO) has sailed through, with the subscription crossing the mandatory 90 per cent level but the demand fell short of the ~15,000-crore mark. The FPO generated bids for 8.5 billion shares, 93 per cent of the 9.1 billion on offer, the data provided by the stock exchanges at 6 pm showed. If the FPO is priced at the lower end of the ~12-13 band, the lender will be able to mop up ~14,270 crore, including the ~4,100 crore worth of shares allotted to anchor investors on Tuesday.

The YES Bank follow-on public offering (FPO) has sailed through, with the subscription crossing the mandatory 90 per cent level but the demand fell short of the ~15,000-crore mark.

The FPO generated bids for 8.5 billion shares, 93 per cent of the 9.1 billion on offer, the data provided by the stock exchanges at 6 pm showed.

If the FPO is priced at the lower end of the ~1 2-13 band, the lender will be able to mop up ~14,270 crore, i ncluding the ~4,100 crore worth of shares allotted to anchor i nvestors on Tuesday.

The bank was aiming to raise ~15,000 crore through the share sale to support growth and bolster its capital adequacy ratio.

SBI Capital Markets, which had underwritten ~3,000 crore of the FP O, will make good the ~730 - crore shortfall in demand.

The bulk of the demand came from i nstitutional i nvestors, including State Bank of India, Life Insurance Corporation, and Tilden Park Capital.

IIFL, HDFC MF, Union Bank, Bajaj Holdings, Avendus, Norges Fund, and Jane Street Capital are some of the investors that subscribed to YES Bank shares in the FPO, said sources

The i nstitutional i nvestor portion of the FP O garnered nearly two times the subscription. Including the anchor investment, institutional investors poured i n nearly ~10,400 crore.

On t he other hand, t he response from individual investors was tepid. The highnetworth individual ( HNI) investor portion of the FPO was subscribed 63 per cent. The retail and employee portions also remained undersubscribed at 46 per cent and 32 per cent, respectively.

Investment bankers said they were still processing some retail applications.

Shares of YES Bank ended at ~19.8, up 2.9 per cent, on Friday. While the shares were available at a 40 per cent discount in the FP O, many investors stayed away, fearing that the large dilution would depress the secondary market price.

Through the FPO, YES Bank will issue over 1 2 billion fresh equity shares, almost equal to its current equity base of 12.55 billion shares.

In March, as part of the rescue plan, YES Bank had received a ~10,000 - crore equity infusion from eight financial institutions led by SBI. These investors were allotted shares at ~10 per share. SBI had invested ~6,050 crore and got a 48.2 per cent stake (pre-fpo basis). It had obtained board approval to invest another ~1,750 crore in the FPO.

People aware of the development said most of the eight financial institutions who invested in March also applied in the FPO to prevent their stake from being diluted.

Some analysts had doubted whether ~15,000 crore would be enough as growth capital.

“Capital potentially being used to meet regulatory requirements, make provisions and pay employee salaries — not for growth,” Macquarie had said in a note on July 10.