Private sector commercial bank, Yes Bank on July 14, 2020, accumulated Rs 4,500 crore from anchor investors before its follow-on public offer that begins on July 15, 2020, investment banking informants explained.
The company has decided the price band to be at Rs 12-13 per share of equity for its follow-on public offer (FPO) which will be unfurling for subscription from July 15, 2020, to July 17, 2020.
Yes Bank is trying to get an investment of Rs 15,000 crore through the issue of shares to guarantee enough funds to enable its growth and expansion, which also includes making its solvency, capital adequacy ratio, and evolving regulatory requirement better.
The investment banking sources expressed that many investors including Foreign portfolio investors have been accorded shares at Rs 12 per share in the anchor portion.
These investors consist of US-based alternative asset manager Tilden Park Capital Management LP, Singapore-based fund management company Amansa Capital, and UK-based fund management firm Jupiter Fund, the sources mentioned.
Tilden Park, a multi-strategy fixed-income-focused alternative asset manager with a specialization in distressed credit, has come into the Indian market by joining the Yes Bank's anchor book. It has given over Rs 2,700 crore in funds to the lender.
Investors who have accorded allotment in the anchor book are inclusive of Elara Capital, Ratnakar Bank Limited (RBL) Bank, Hinduja Group's Leyland Finance, HDFC (Housing Development Finance Corporation) Life Insurance Company and ICICI (Industrial Credit and Investment Corporation of India) Prudential Mutual Fund, the informants mentioned.
Kotak Mahindra Capital Company, State Bank of India (SBI) Capital Markets, Axis Capital, Citigroup Global Markets India Private Limited, DSP Merrill Lynch, HSBC (Hongkong and Shanghai Banking Corporation Limited) Securities and Capital Markets (India) Private Limited, ICICI (Industrial Credit and Investment Corporation of India) Securities and YES Securities (India) Limited are the merchant bankers of the issue.
Investors looking for listing gains should not invest in Yes Bank’s Rs 15,000-crore follow-on public offer (FPO) scheduled to open on July 15, 2020, said analysts.
Investors who wish to keep the shares with them for more than three years can aim to subscribe to the issue, the analysts contended. The private lender has set the issue for Rs 12 per share as against the price of Rs 20.95 on the closing of the market on July 14, 2020.
The issue is probably to be fully subscribed, the analysts mentioned. But some traders have made a strategy to get some gain from the offer, the analysts said.
“For those applying in this FPO, it would be immature to assume that one would subscribe at 13 and sell on the allotment at a huge profit as almost everyone may want to utilize that opportunity to make a quick buck,” mentioned independent market advisor Ambareesh Baliga.