Yes Bank revives QIP, looks to raise up to $750 million

For the qualified institutional placement (QIP), Yes Bank has set a floor price of Rs1,498.95 per share, a 1.12% discount to Thursday’s close


On 7 September, Yes Bank launched a $1 billion QIP only to withdraw it a day later. Photo: Abhijit Bhatlekar/Mint
On 7 September, Yes Bank launched a $1 billion QIP only to withdraw it a day later. Photo: Abhijit Bhatlekar/Mint

Mumbai: Private sector lender Yes Bank Ltd revived its qualified institutional placement (QIP) issue on Thursday with a reduced size of $750 million after its attempt to raise $1 billion in September flopped.

According to two merchant bankers in the know, the bank has opened an issue worth $650 million with an option to retain a further $100 million. Yes Bank declined to confirm the issue size; its stock exchange statement said that it has the floor price at Rs1,498.95 per share. That is a discount of 1.12% to Thursday’s closing price of Rs1,516.05 a share. “The bank may at its discretion offer a discount of up to 5% on the floor price in the QIP,” the statement said.

Yes Bank will offer these new shares at Rs1,455 to Rs1,500 apiece in this issue, Bloomberg reported citing people it didn’t identify.

CLSA India Pvt. Ltd, DSP Merrill Lynch Ltd, IIFL Holdings Ltd and Motilal Oswal Investment Advisors Pvt. Ltd are the managers for the issue, the regulatory filing said.

The decision to raise these funds came after the bank’s capital-raising committee approved enabling resolutions on Thursday, Yes Bank said in its stock exchange notification. The approvals of the capital-raising committee follow the approvals by the board of directors on 27 April and 20 October 2016 and a shareholder approval on 7 June 2016.

On 7 September, Yes Bank launched a $1 billion QIP only to withdraw it a day later, citing “extreme volatility during today’s trading because of misinterpretation of new QIP guidelines”. It never said what these misinterpretations were. Mint had reported then that the Securities and Exchange Board of India (Sebi) was examining whether its listing norms were breached in the QIP.

In its draft prospectus filed with the National Stock Exchange (NSE) on Thursday, Yes Bank confirmed that it had received queries from the Reserve Bank of India (RBI), Sebi, NSE and BSE about its previous QIP attempt. The bank also received a caution note from NSE to ensure future compliance, it said.

Yes Bank’s QIP is the biggest institutional placement since Hindalco Ltd raised $500 million in the first week of March.

“We intend to use the net proceeds of the issue for meeting our capital requirements under Basel III norms and ensuring adequate capital to support growth and expansion, including enhancing our solvency and capital adequacy ratio and general corporate purposes,” the bank said in its draft prospectus.

Yes Bank had reported a net profit rIse of 30.6% to Rs883 crore in the December quarter from a year earlier. The bank’s total advances rose 38.7% from a year ago to Rs1.17 trillion. Deposits rose 30.5% toRs 1.32 trillion.

Yes Bank’s gross bad loans ratio as on 31 December was 0.9%, as against 0.8% in the previous quarter. It had a capital adequacy ratio of 16.9% at the end of December, well above the regulatory requirement of 10.25%.

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