Mumbai: New-generation private sector lender Yes Bank has zeroed in on qualified institutional placements (QIP) and private placements to raise resources to primarily fuel its growth and maintain capital adequacy ratio, a top bank official said.
“We will most likely resort to a private placement with one or two investors or go in for a qualified institutional placement (QIP),” bank’s CFO Rajat Monga told PTI here.
He, however, ruled out a follow-on public offer as well as a GDR issue.
The bank had earlier in the week announced its intention to raise capital of around $210 million by end-2007.
“Given the bank’s excellent track-record, high growth, the good demand for our stock and our potential, I believe we can get a good price,” he added.
The bank plans to issue two-crore additional equity shares, the sale price of which will be higher than the prevailing market price. Market sources estimate the pricing to be between Rs 200-225 per share.
Yes Bank had earlier placed equity with Swiss Re at 33% higher than its market price.
Elaborating on the proposed capital-raising programme, Monga said the bank “plans to raise $110 million by way of equity and the remaining $100 million through debt.”
This will be raised in both the Tier-I and Tier-II structures, primarily to fuel the bank’s growth and maintain its capital adequacy ratio, he said.
The Mumbai-headquartered lender has also planned an aggressive branch expansion programme pan-India and targeted a 100-strong branch network by end of FY 08.
“In the immediate present, we plan to grow our branch network from the current 40 to 60 by August. By end-March next year, we will have a 100-strong branch network and by 2010, around 250,” Monga said.
The bank also proposes to up its headcount from the present 2,443 to 4,800 by FY 08 and to 10,000 by 2010.
“We also plan to rope in a strategic financial partner by then,” he said.