New Delhi: Yes Bank on Monday said it would raise $250 million in the current fiscal by private placement of shares and through bonds issue.
As part of its fund raising plans, French financial institution Proparco will invest $20 million in the bonds of Yes Bank. This is for the first time that the French government sponsored multilateral agency would invest in an Indian bank.
The capital raising would be done “to further augment our Tier II capital base and our capital adequacy and enhance the long-term resources of the bank,” Yes Bank founder and managing director Rana Kapoor told reporters here.
Of the total amount, Yes Bank plans to raise $150 million through private placement of shares and the rest through bonds issue.
“$150 million would be raised through private placement of shares with potential buyers and $100 million through upper and lower tier II capital by the end of March 2010...$250 million in totality,” Kapoor said.
Meanwhile, the public sector lender today entered into an agreement with Proparco to raise $20 million (Rs95 crore) through subordinated bonds.
Proparco is a private sector investment arm of Agence Francaise de Developpement (AFD), the leading French multilateral development finance agency which works on behalf of the French government.
Proparco is also in talks with other corporates including ICICI Bank and SREI Infrastructure.
The bank plans to raise these amount from public sector lenders, including Bank of Baroda, Bank of India, Punjab National Bank and Canara Bank, besides the country’ largest insurer Life Insurance Corporation.
Kapoor said that it has received the board of directors and shareholders nod to raise up to $250 million through private placement of shares with potential buyers.
As of June 2009, the capital adequacy of Yes Bank stood at 17.6%.
The banks also plans to foray into retail broking business in the next six months. “Broking we should do in the next six months,” Kapoor added.
The bank expects its loan growth between 35% and 40% and deposit growth in the range of 30% and 35% in the current fiscal.
When asked if there are chances of interest rates to go higher, Kapoor said that there is significant liquidity in the market and “I don’t see any significant increase in rate at least till March 2010 as credit demand is yet to pick up.”
The bank currently has 123 branches, which it intends to increase to 700 by 2015. It also aims to increase its ATMs to 3,000 from around 200 at the current levels.