Mumbai: Yes Bank Ltd on Friday managed to close its follow-on public offer (FPO) with 95% subscription, driven by institutional investors, even as HNIs and retail investors showed tepid interest in the bank's offering.
The bank received subscriptions for shares worth ₹14,267 crore in the FPO, at the lower end of the price band of ₹12-13 per share.
Institutional investors drove the subscription, with shares reserved for these investors getting subscribed 1.9 times, excluding the anchor allocation.
"Domestic financial institutions played a big role in the FPO, and subscribed to almost half of the book, excluding the anchor allotment," said a person advising the bank on the FPO.
Some of the institutional investors that participated in the deal include State Bank of India, Life Insurance Corp of India, IIFL, Edelweiss, Bajaj Allianz, HDFC Life, Punjab National Bank, HDFC MF, Union Bank, Bajaj Holdings, Avendus Wealth Management, IFFCO Tokio General Insurance, Norges fund, Millennium Management Global, Aurigin Capital, Exodus Capital, Wellington Capital, Jane Street Capital, said a second person advising the bank.
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Apart from institutional investors, demand from all other categories of investors was tepid. The portion of shares reserved for high net-worth individuals and other non institutional investors was subscribed 63%, while the shares allocated for retail investors and employees were subscribed only 47% and 33%.
While the bank has managed to raise only Rs14,267 crore out of its total target of Rs15,000 crore, the shortfall is likely to be funded by SBI.
Following the FPO, the bank’s capital adequacy ratio will increase to 13% from the existing 6.3%. SBI, the largest investor in Yes Bank, will invest up to ₹1,760 crore in the FPO. SBI’s additional investment will ensure that its stake does not fall below 26% after the FPO.
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