Yes Bank Ltd, India’s fifth-largest private-sector lender, has launched a share sale to institutions to raise as much as $750 million (about Rs 4,900 crore).
The qualified institutional placement (QIP) issue has a base size of $650 million and an over-allotment option of $100 million, the lender said in a stock-exchange filing on Thursday.
The share sale comes seven months after the bank deferred a plan to mobilise as much as $1 billion by selling shares to institutional investors.
Yes Bank, led by co-founder Rana Kapoor, has priced the latest share sale at Rs 1,498.95 apiece, with an option of offering a 5% discount on the floor price.
The floor price is at 1.12% discount to Wednesday’s close price of Rs 1,516.05 apiece.
Back-of-the-envelope calculations indicate that Yes Bank will add between 28.39 million and 32.76 million shares to its equity base. This will result in a promoter stake dilution of 6.3-7.2% depending on the amount raised.
Promoters held a 21.78% stake in the bank at the end of December 2016, stock-exchange data showed.
The bank said it will use the funds to meet capital requirements under Basel III norms, grow its business, enhance its solvency and capital adequacy ratio and for general corporate purposes.
A QIP is a capital-raising tool introduced by the capital markets regulator Securities and Exchange Board of India (SEBI) in May 2006. The fundraising option helps listed firms raise funds in a faster and efficient manner, with less paperwork as compared with an IPO, by issuing shares or securities other than warrants that are convertible into equity shares to institutional investors.
Yes Bank had deferred its QIP in September 2016 as investors withdrew their bids after the stock fell below the floor price set at the time. The “deferment” prompted SEBI to investigate the matter and found that Yes Bank had violated key norms related to listing obligations.
Thursday’s fundraise follows the bank’s $500 million private placement in June 2014 to bolster its capital position. The QIP was then priced at Rs 550 per share.
Yes Bank reported a 31% rise in December quarter net profit to Rs 882.63 crore from Rs 675.74 crore a year earlier, driven by higher net interest income and lower provisions.
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