Yes Bank FPO subscribed 95% so far, QIB remains strong on final day

The follow-on public offer of Yes Bank has been subscribed 92.75 percent so far on final day of bidding, July 17.

The issue has received bids for over 847.86 crore equity shares against FPO size of more than 909.97 crore equity shares (excluding anchor book), the data available on the exchanges showed. If we include the anchor book portion, then the subscription stood at 95.14 percent.

The maximum bids were received at lower end of price band of Rs 12-13 per share. In fact, the anchor book, through which the lender had received Rs 4,098 crore, was also subscribed at Rs 12 per share.

The reserved portion of non-institutional investors has seen subscription of 63 percent and that of retail 46.96 percent and employees 32.62 percent, while the portion set aside for qualified institutional buyers was subscribed 1.90 times.

A total of 27 institutions bid for the QIB portion such as SBI, LIC, IIFL, Edelweiss, Bajaj Allianz, HDFC Life, Punjab National Bank, HDFC MF, Union Bank, Bajaj Holdings, Avendus Wealth Management, IFFCO Tokio General Insurance, Norges fund, Schonfled, Millennium Management Global, Aurigin Capital, Exodus Capital, Wellington Capital, Jane Street Capital, Segantii Capital Management and De Shaw & Co, as per a company release.

With the current status (including anchor investors' commitment of Rs 4,098 crore), the private sector lender so far has raised more than Rs 15,000 crore as compared to total issue size of Rs 15,000 crore.

Also as per the prospectus, the bank had entered into the first underwriting agreement dated July 7 with SBI Capital Markets and the Registrar, and pursuant to which, SBI Capital Markets had agreed to underwrite Rs 3,000 crore worth of shares of FPO, at a price equal to the lowest end of the price band.

So overall the bank has received committed subscription of worth more than Rs 15,000 crore now.

"The issue already received required subscription of 90 percent out of total IPO size Rs 15,000 crore. It already received Rs 4,098 crore from anchor investors, more than Rs 8,700 crore worth of bids received so far (which gets changed till the issue closing today) and SBI Capital Markets already gave underwriting commitment of Rs 3,000 crore, which ultimately said the issue already subscribed over 90 percent," Arun Kejriwal, the primary capital market expert and owner of AK47.in told Moneycontrol.

The public issue has to receive minimum subscription of 90 percent of the offer, including through devolvement of underwriters, if applicable, within 60 days from the date of bid/offer closing date, as per the terms of the offer.

"We believe that the inflow of Rs 15,000 crore from the upcoming FPO will go a long way in strengthening the bank's balance sheet by enhancing its CET 1 ratio, solvency ratio, capital adequacy ratios, and would provide growth capital to the bank," said NVS Brokerage while recommending subscribe rating on this issue with an 18-24 month horizon.

"With its checkered history behind us, it appears that with a new management, Yes Bank has finally managed to put its house in order and the trajectory appears to be upward in the times to come," NVA added.

Yes Bank has been supported by marquee institutions – State Bank of India, Kotak Mahindra Bank, ICICI Bank, Federal Bank, HDFC, Axis Bank, Bandhan Bank and IDFC First Bank which all had invested Rs 10,000 crore in the bank through Reconstruction Scheme in March this year.

The FPO is largely aimed to ensure adequate capital buffer to support growth plans, alongside absorbing further stress points from high NPA levels.

Kotak Mahindra Capital Company, SBI Capital Markets, Axis Capital, Citigroup Global Markets India, DSP Merrill Lynch, HSBC Securities and Capital Markets (India), ICICI Securities and Yes Securities India are the book running lead managers to the issue.