Yes Bank has been in news lately for the spurt in its NPAs and deterioration of its financial position. The bank is coming with an FPO to raise additional equity from the public. Further purchase offer (FPO) is a process by which a listed company raises fresh capital by issuing new equity shares to the public. The existing investors though do not look much excited about the FPO as the floor price has been set at ₹12, almost 50% lower than the market price. At 2:07 p.m, one share of Yes bank is trading at ₹22.10. The stock has fallen almost 17% from its Thursday closing.
Let’s take a look at the important features of theYes Bank FPO.
1) The FPO of Yes Bank will open on July 15 and close on July 17. Anchor investors bidding will happen on July 14.
2) Yes Bank aims to raise a fresh capital of ₹15,000 crore through the further purchase offer (FPO). Out of this, ₹200 crore worth of equity shares will be reserved for ite employees.
3) The floor price of the Yes Bank FPO was set at ₹12 per equity share with a cap price of ₹13 per share. Employes bidding in Employee Reservation Portion will be eligible for a discount of Re 1 per share.
4) A minimum bid of 1,000 equity shares will be allowed and in multiples of 1,000 equity shares thereafter. Thus, the minimum bid for regular investors will be worth ₹12,000 and ₹11,000 for the eligible employees.
5) Investment banks Axis Capital, Kotak Mahindra Capital, Citi, and Bank of America are advising Yes Bank on the FPO.
6) On Wednesday, India’s largest lender State Bank of India (SBI) said its board has approved an investment of up to ₹1,760 crore in the upcoming follow-on public offer of Yes Bank.
7) On 13 March, the government had approved a rescue plan for Yes Bank backed by SBI. Under the plan, domestic investors including SBI, Housing Development Finance Corp, ICICI Bank, Kotak Mahindra Bank, Bandhan Bank, Federal Bank and IDFC First bank invested Rs10,000 crore into Yes Bank.
8) Yes Bank CEO, Prashant Kumar is optimistic of the FPO. He says that the capital raised via FPO will take care of growth for next two years.