Yes Bank, India’s fourth largest private lender in terms of assets, has has just closed its raise of around $270 Million through QIP (Qualified Institutional Placement). After this exercise was done, total capital adequacy ratio increased to 16.2%, Tier 1 ratio increased to 11.3% and core equity tier 1 ratio increased to 8.6%. The QIP issue saw strong response from foreign as well as domestic QIBs. The strong response to the issue highlights a well-diversified representation and demand domestically & across the world.
This development comes at a time when the stock market hasn’t seen best of times. Despite starting this quarter at around 40,000 mark, Sensex has lost over 1500 points since beginning of July. Banking sector stocks overall, have not performed too well on the dalal street. However, shares of Yes Bank have gained over 8% in last two trading sessions on top of the new of its last QIP being oversubscribed.
The bank will reach out to its shareholders in next few weeks to seek an approval for another fund raise, Livemint quoted an insider aware of the development.
Another person quoted in the same statement mentioned that the bank is looking for some strategic investment to onboard names which could support the bank in its growth.
Yes Bank’s exchange filing on Thursday confirmed that it has sold 231 Million shares. The process saw a great response from QIBs, both foreign and domestic. Investors in this sale included Societe Generale (18.75% of 231 million), Key Square Master Fund Lp (16.2%), BNP Paribas Arbitrage (14.43%), HDFC Balanced Advantage Fund (10.26%) and Key Square Master Fund II Lp (5.88%), among other shares. The QIP also saw participation from Government Pension Fund of Norway, British investment firm Ashmore Group and Aditya Birla Sun Life Asset Management Co. Ltd etc.
The latest fund raise, if successful, could see Yes Bank diluting another 20% of its stake. As the amount sought is higher, it is looking to onboard strategic investors, who could add value to the growth in a longer term.
In a recent interview, Ravneet Gill, CEO – Yes Bank, had spoken in detail about his plans of raising funds in order to strengthen liquidity and get things back on track and with latest developments, his efforts seem to be paying off.