YES Bank gets $500 mn via QIP

Private Sector lender YES Bank has raised $500 million via the qualified institutional placement (QIP) route. With this issue, the promoters have divested 12.9 per cent stake in the bank. Earlier the promoter shareholding in the bank stood at 25.55 per cent but after the QIP issue the stake has come down to 12.65 per cent.

The issue was aimed at raising capital to support its growth plans and also to meet incremental capital to facilitate the additional capital requirements under the Basel-III norms. The issue was subscribed five times, showing that investors have an appetite for equity deals now.

The bank issued 5.35 crore shares at Rs 550 per share which was at a premium to Thursday’s close of Rs 548.15.

“The placement increases the overall capital adequacy to over 18 per cent and Tier-I capital of around 13 per cent. The additional capital now brings the total shareholders’ funds to Rs 10,033 crore, and the total capital funds to Rs 15,154 crore pursuant to the QIP,” the lender said in a release.

Rana Kapoor, managing director & CEO , said, “This capital raising has been consummated to further augment our core Tier-I capital base/capital adequacy, and enhance the long-term resources of YES bank ensuring that the bank is extremely well positioned to benefit from significant growth opportunities that will accelerate with the improving political and economic environment in India.”

As of March-end, the bank’s capital adequacy ratio was 14.4 per cent, according to Basel-III norms, of which Tier-I capital was 9.8 per cent.

In the offer document, the lender said it has approached the Reserve Bank of India (RBI) to review its directive to promoter Rana Kapoor to bring down his holding in the bank to 10 per cent of capital by the end of March 2014.

Citing the new bank licensing guidelines, YES Bank said these norms permit promoters to hold up to 15 per cent shareholding through a non-operative financial holding company.

“We are currently not in compliance with RBI’s direction to reduce shareholding of the promoter and promoter group in the bank,” the bank said.

Earlier, in January 2010, the bank had raised Rs 1,033.87 crore through the QIP route. In December 2006 and December 2007, the bank had raised Rs 120 crore and Rs 330.75 crore, respectively, through private placements.