Yes Bank’s ₹15,000 crore FPO subscribed 24% on first day

Mumbai: The ₹15,000 crore follow-on public offer (FPO) of Yes Bank Ltd was subscribed 24% on Wednesday, the first day of the offering, according to data from stock exchanges.

While the portion of shares reserved for institutional investors was subscribed 66%, the non Institutional portion was subscribed 4%. The retail portion was subscribed 9% times and that for employees was subscribed 5%.

Yes Bank is aiming to raise ₹15,000 crores through this issue, the price band for which has been fixed at ₹12-13 per share.

The issue will close on 17 July.

On Tuesday, the lender informed stock exchanges that it had allotted 3.41 billion shares worth ₹4,098 crores to anchor investors a day before its follow-on public offering. The shares were allocated to the anchor investors at ₹12 per share.

Tilden Park invested ₹2,250 crores to lead the anchor investment for its ₹15,000-crore FPO. The other anchor 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.

The funds raised from its FPO will take care of its growth requirements for two years. The ₹15,000 crores will be used as buffer provisioning, said Prashant Kumar, managing director and chief executive officer of Yes Bank in a press meet on Monday. He, however, said the provisioning against the impact of COVID-19 will not be more than 100 bps.

The bank is aiming for a loan book mix of 60% for retail and small and medium enterprises (SMEs) and 40% for corporates, Kumar said. The private lender is targeting a 1% return on assets over the next 1-3 years and 1.5% over 3-5 years.

The bank also aims to hive off its bad loans into a separate subsidiary, Kumar said.

Following the FPO, the bank’s capital adequacy ratio will increase to 13% from the existing 6.3%. SBI, the largest investor in Yes Bank, will invest up to ₹1,760 crores in the FPO. SBI’s additional investment will ensure that its stake does not fall below 26% after the FPO.