Yes Bank FPO: The lender plans to utilise the proceeds from issue to meet its capital requirements
Here are 10 things to know about the Yes Bank FPO:
By the end of second day, Yes Bank's FPO had received 434.15 crore bids, amounting to a subscription of 47.71 per cent, data from the National Stock Exchange showed.
On Monday, Yes Bank - the country's seventh largest private sector lender by market capitalisation - said it had raised Rs 4,098.50 crore from anchor investors at the lower end of the price bank.
Yes Bank has fixed a price band of Rs 12-13 per share for the public offer. In the given price range, the private sector lender will be able to raise Rs 10,919.72-11,829.70 crore.
The Reserve Bank of India (RBI) took control of Yes Bank, after the bad-debt laden lender had failed to raise the capital needed to stay above mandated regulatory requirements.
Since then, SBI has stepped in to acquire a stake in the private lender and to keep it afloat.
However, SBI's total investment is not likely to exceed Rs 10,000 crore, according to the bank's chairman.
Yes Bank was on the brink of collapse earlier this year due to its past history of providing easy loans, which ended up as non-performing assets - or bad loans - on its books.
Brokerage Nirmal Bang has an "avoid" call on the Yes Bank FPO, saying its cheap pricing comes with a baggage of uncertainties.
The current financial year could be a year of loss for Yes Bank even as the underlying structure and business strategy changes, Nirmal Bang said in a note.
"At the current juncture, our biggest concern with Yes Bank is the high level of stress, especially in such a fragile environment... While we agree that the issue is priced cheaply, but the valuation should be seen in context of the uncertainties, the likely stress and overall (poor) financial performance that is expected in the foreseeable future," it said. "We would be more comfortable getting into the stock once we have more clarity on the numbers and the future trajectory," Nirmal Bang added.
