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YesBanktotankupon$1billionviaQIPforgrowthdrive
PostaComment

ByIndulalPM&SaikatDas,ETBureau|Updated:Aug11,2016,06.57PMIST

MUMBAI:YesBankissettolauncha$1billionsharesaletoinstitutionalinvestorsinwhatwouldbe
thebiggestsuchexercisethisyeartosupportitsexpansionandtakeadvantageofanexpected
economicrevivalinIndia.

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YesBank
TheRanaKapoorcontrolledbankhasmandatedGoldmanSachsandMorganStanleyasleadbankers
totheissue,whichisexpectedtobelaunchedwithin30days,peoplewithknowledgeofthematter
toldET.

MotilalOswalSecuritieshasalsobeenmandatedforthequalifiedinstitutionalplacement(QIP),whichwillseeastakedilutionof1214percentofthe
promoterholding,whichiscurrently21.88percentofthetotal.
"Theprocessisonandthebanksareworkingonthetransaction.Ifmarketconditionsremainpositive,wehopetolaunchtheissuewithinthenexttwo
tofourweeks,"saidoneofthepersonscitedabove.
Thefundinfusionmayadd150basispointstothebank'scapitaladequacyratio,whichstoodat15.5percentintheJunequarter.YesBank,Motilal
OswalandMorganStanleydeclinedcomment.
GoldmanSachsdidn'treplytoqueries.Thebankshouldn'thaveanydifficultyfindingtakers."AslongasYesBankcontinuestogrow,itwillrequire
capital,"saidRSreesankar,headofinstitutionalequitiesatPrabhudasLilladher,abrokingfirm.
"Acombinationoffactors,includingthecurrentpaceofgrowthandassetqualitymaintenance,wouldpromptinvestorstosubscribetotheQIPissue,"
saidRSreesankarofPrabhudasLilladher.
AsharesalewillfuelYesBank'saggressivegrowthstrategy,CitigroupanalystsAdityaNarainandAbhishekSahoowroteinanoteonJuly27."Yes
shouldberaisingcapitalsoon(~$1billion).That'salot,andwillbethefuelforitsfairlyaggressivetargets:2530percentloangrowth,highermargins,
moreretail(20percentofloanstarget),higherCASAandlowerpricing,andmorefinancialservices(AMC,brokerage),"theysaid.
"It'sgotbusinesstailwindandrisingtrackrecord/credibilityonbeingabletodeliverbutisonlyraisingexpectationsandthat,increasingly,isitsrisk."
TheboardofYesBankapprovedraisingupto$1billion(Rs6,650crore)throughoneormoreoffers,ithadsaidinApril.
ChairmanRanaKapoorsaidatthetimethattheexercisewouldbecompletedinoneshot.TheboardhadalsoapprovedtheraisingofuptoRs10,000
croreinIndianorforeigncurrencythroughprivateplacementofdebtsecuritiestoeligibleinvestors.

Amonthlater,theCabinetCommitteeonEconomicAffairsapprovedYesBank'sproposaltoincreasetheoverseasinvestmentlimitto74
percentfrom60percent,enablingforeignfundinflowsamountingto$1billion.
Raisedmoneyin2014too
Earlier,in2014,thebankhadraised$500millionthroughaQIP.IndiancompaniesraisedasmuchasRs1.04lakhcrorethroughequity
issuesintheyearendedMarch,themostsince2011,accordingtoPrimeDatabase.
ThisincludesRs14,357.87crorethroughinstitutionalsharesalesandRs19,819.71crorebywayofoffersforsale,thedatashowed.Yes
Bankhasgained54.82percentinthepastyear,significantlyoutperformingthebenchmarkSensex,whichdropped1.16percent.
TheBankexfell1.52percentinthesameperiod.PrabhudasLilladherhasa'buy'recommendationonYesBankwithapricetargetofRs
1,250,anupsideof4.2percentfromJulylevels.
ThestockendedatRs1,264.8onWednesday,up0.43percent,whiletheSensexfell1.1percentto27,774.88points.The"bankwill
continuetoreportrobustoperatingmetricsgoingaheadandisexpectedtogrowatthesamepacepostraisingcapital",thebrokinghouse
saidinareport.
"Webelievethebankhasmadeconsciouseffortstomakeitsassetandliabilityfranchisegranularwhichwillhelpimprovemarginprofile
andkeepassetqualitystable."
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